The Demise of Las Vegas

Is There A Demise?

Social media sites are trumpeting the death of Las Vegas. It’s the current thing. April Becker is on the Clark County Commission. She tweeted

The demise of Las Vegas has been greatly exaggerated. TSA data shows Vegas passenger traffic is up in July.

I don’t spend a lot of time on the Strip. Whenever I go, it seems pretty crowded. Parking takes a bit of time, but if you have ever parked in Las Vegas, you know it is the most efficient form of parking ever.

Here is what we objectively know.

Fontainebleau opened and had a rough opening. Resorts World opened a couple of years ago, and it’s had ups and downs. The other properties have been steadier but have had ups and downs too.

The Culinary Union Local 226 has continually asked for wage increases, which have increased the cost for operators. They are 60,000 members strong. The price of things like beef is at an all-time high nationwide. Vegas food costs are not immune.

On social media, I see long lines to check into hotels. They haven’t figured that operational process out yet. But in other places, casinos have it figured out. More automation will come, including robots to clean rooms. There are already Star Wars-like security robots, and of course, cameras everywhere.

Some data points to Californians not coming to Vegas in the numbers they used to. Typically, the interstate is jammed with cars coming and going from LA to Vegas. For years, people have wanted California to add lanes to ease traffic congestion, but they have refused. Vegas needs Californians to keep coming.

There is a bullet train being built. I am bearish on train travel. It’s pretty easy and cheap to fly from California to Vegas. On the other hand, when you live in Vegas, it is relatively cheap to fly to other places if you pick the right date and flight. Vegas baggage handlers are the best in the business, and you never wait for bags. Soon, there will be a Boring Company tunnel from the airport to resorts, relieving stress on shared ride lines and enraging the taxicab lobby.

From an article in the Las Vegas Review-Journal written by Terry Castleman of the LA Times:

Visits to Las Vegas were down 11.3% in June 2025 versus a year earlier, according to data from the Las Vegas Convention and Visitors Authority.

Traffic on Interstate 15 at the California-Nevada border was down 4.3% over the same period, suggesting fewer visitors from the Golden State heading for Vegas casinos.

The number of air travelers into Las Vegas overall declined 6.3% over the previous June. In 2024, Californians made up more than a fifth of air travelers into Vegas, with nearly half of those coming from the Los Angeles metro area.

A demographic report from the visitors authority estimated that Southern California provided 30% of all visitors to Las Vegas in 2024.

California has very high gas prices, over a dollar a gallon higher than Las Vegas, which has very high gas prices compared to other places in the US. The cost of living in Cali is very high. Rent, interest rates, groceries, and taxes are high. Competition for the dollar in a person’s pocketbook between the government and entertainment is always won by the government.

Weekend room vacancies are up. One thing casinos can do is drop the cost to a point. When they did that right after Democratic Governor Steve Sisolak’s draconian and totalitarian COVID-19 policies ended, it wasn’t great for casinos. Fights and crime were a problem.

One thing I have noticed is that with the corporatization of the casino, the economics and the way they are run have changed a lot. When it was mob-run, it was more off the cuff.

The MBAs and data crunchers at the corporate casino have installed Disneyland pricing into their models. In economic terms, it is “first degree, second degree, third degree, fourth degree” price discrimination, and it might even go to the seventh degree. They don’t need you to gamble to make money off of you. They make money if you show up. Plenty of other businesses, like $eBay, practice it too.

Casinos have installed all kinds of tech inside. Facial recognition tech and statistical analysis can let them know when you walk into the casino and calculate how much you are liable to spend. They can then figure out ways to prompt you on your phone or other ways to get you to spend more.

Year-to-date chart data shows Las Vegas Sands LVS 0.00%↑ is at its stock high for the year.

WYNN 0.00%↑ is the same. Highs.

Caesar’s is not in great shape, but that is probably other factors, not Las Vegas foot traffic being up or down. Haven’t looked at their balance sheet or income statement to check.

BYD 0.00%↑ Boyd Gaming isn’t in bad shape. Boyd operates off the Strip. It’s a locals’ casino.

The A’s continue to build their stadium. Market times for real estate are a bit longer than they were, but you would assume with higher rates of interest, they should be. If you have a house that is rehabbed, it will be sold quickly. Unrehabbed properties sit. I can’t speak for new construction, but there is plenty of that.

The Sphere is still crowded with new acts. Formula One went off better this year than last. Football season is coming, and the Raiders consistently sell out 50% of the stadium to opponents’ fans traveling in. Convention business has not slowed down.

Nevada still has a wagon train full of people coming to escape blue states with high taxes. Nevada is a purplish blue state that is starting to trend red. We will see. Sisolak jammed through a heavily gerrymandered state map that Republicans have to contend with. The figurehead of the state’s Republican Party has been no match for the Democrats, and they control the state legislature and many state offices, along with both Senate seats and the majority of national congressional seats. The population continues to change, though.

Trump’s no tax on tips was obviously very popular. In the BBB, Congress limited deductions on gambling losses, which, for Vegas’ sake, hopefully will be fixed.

I wouldn’t start pounding nails in a coffin yet. The data is pretty messy. A lot of the people who cheerlead bad data are going for clicks, or they just hate Trump and want to blame him.