Prostitution: Economy Hits Nevada's Brothels

They've been banished to remote stretches of desert, some have been raided, others shut down and one even sold on E-bay. Nevada's legal brothels have managed to survive through some tough situations. Their latest problem, however, could prove to be too much. According to George Flint, Director of the Nevada Brothel Owners' Association, revenue for the 25 businesses in his membership organization is down by as much as 45 percent. The reason: Sex for money may be recession resistant but it's not recession proof. "Business is in a lower slump than I've ever seen it before," Flint says.

In Nevada, the world's oldest profession has been very lucrative. In a typical year, legal brothels generate about $50 million in total revenue and have an economic impact of about $400 million on the state. But in the last 18 months the industry's cash flow has taken a dive. Why? Like other businesses around the country, bordellos throughout the state are feeling the pinch of rising gas prices and a weak economy.

Several of the hardest hit are the houses of prostitution in Nevada's rural northern areas, which get roughly 60 percent of their business from truckers. "Some of these brothels are out in the middle of nowhere so fuel prices have an effect, says Dennis Hof, owner of the infamous Moonlite Bunny Ranch. According to the U.S. Energy Information Administration, diesel on the West Coast now costs $4.87 per gallon. That means truckers could easily spend $1,000 to fill up their tanks, leaving them with little extra cash and less likely to take a detour. For bordello owners, relocating to more central locations is impossible. Under Nevada law, brothels can only operate in counties with fewer than 400,000 residents.

Yet, even brothels located in the south, closer to tourist-populated places like Las Vegas, are not fairing much better. Flint estimates that 75 to 80 percent of Southern Nevada's brothel business comes out of Sin City. But Las Vegas is somewhat down on its luck. Casino gambling revenue fell from $614.9 million in December to $517.5 million in March, according to the Nevada Gaming Control Board. Many brothels consider gambling direct competition for a tourist's discretionary dollars, and if their competition is suffering, it's not a good sign. "Even if someone does get to Vegas, they may not spend their money on a brothel as a form of entertainment because times are tough," says Bob Fisher who represents the Chicken Ranch brothel that's about 50 miles from The Strip.

To stay competitive, brothel owners are turning to advertising. Until last July, bordellos were not allowed to advertise outside their immediate areas. Now they can directly market their services in Vegas, Reno and other cities where their existence was known only by word of mouth. Fisher, who acknowledges that the Chicken Ranch has been affected by the economic downturn but won't go into specifics, says they've done mobile billboards, yellow pages and are looking into radio and TV. Still, advertising hasn't been easy. "It's a double-edged sword," says Fisher. "We have the right to advertise, but the people we advertise with have the right to say no." And they often do. Several area papers don't want to run ads featuring legal prostitution, he says: readers or other advertisers might not look kindly on ads for a business that's viewed as seedy, at best.

Media exposure certainly has its benefits. Featured in the ongoing HBO reality series, Cathouse, Hof's Bunny Ranch is going strong. While others brothels saw a slump in revenues, Hof experienced a 30 percent jump in May. But he's not resting on his laurels. Last week he began offering a recession special: The first 100 customers who show up with their tax rebate checks receive twice the "services" for the price of one. "We always give our customers the most bang for the buck," he says. "You bring your $600 check in, and we give you the $1,200 George Bush party--three girls and a bottle of champagne." That's one way to stimulate the, um, economy.