But in Las Vegas—a city devoted to excess of all kinds—supply and demand for casino gambling seem to be in balance. The slumping economy and the continuing boom in Native American casinos in California, Vegas's largest feeder market, are having an impact. In August, Nevada's gambling take fell 4.4 percent from August 2006, below expectations. The city's growth is now dependent on a diversification process that began in the 1980s, when casino operators first made massive investments in the retail, dining and entertainment experiences that coax British couples to fly 6,000 miles to sit alongside an indoor canal under a painted sky studded with sprinkler heads. In the second quarter, mega-operator MGM Mirage reported that casinos accounted for about 37 percent of overall revenues. At the posh Bellagio, gaming provides only about one quarter of revenues. Today MGM is rolling the dice on the $7.4 billion City Center development, slated to open in late 2009. Sure, it will contain a new casino. But the real money will come from selling the 3,600 condominiums it plans to build.

In other words, the Las Vegas economy is looking more like that of America as a whole—driven by discretionary consumer spending on clothes, entertainment and food. And as a result, this city that has defined itself as being outside the mainstream will increasingly be constrained by the quotidian macroeconomic factors that drive housing and retail markets across the country: interest rates, employment growth and disposable income.

At the same time, the rest of the country is starting to look more like Las Vegas. As the strip fills up with condos and veteran casino operators tout their malls and variety shows, Native American tribes and states are devising means to separate locals from their hard-earned wages. Kansas earlier this year passed a law allowing for the potential opening of four state-owned casinos. In Massachusetts, where the Mashpee Wampanoag tribe wants to build a casino, Gov. Deval Patrick in September offered a plan to bring three destination resorts to the state, including one in Boston. The historic wellsprings of Prohibition and Puritanism, respectively, are now taking economic cues from Sin City.

Meanwhile, Las Vegas resort operators will have to redouble their efforts to stage new shows to attract tourists from Britain, and beyond. Céline Dion is packing up her show and leaving Las Vegas in December.

With Ashley Harris

© 2007