Once on a visit to Las Vegas years ago I met a friend at his hotel, and I happened to notice that the windows to his guest room were sealed shut. You couldn’t open them to let in some outside air. It seemed odd to me, but I guess I didn’t know much about gambling towns in those days. My friend brought me up to speed: “That’s so people won’t jump out the windows to kill themselves.”
Oh, right. One of the things that “stays in Vegas” is the desperation of those hoping to change their lives by gambling with their savings. When that plan fails, people will sometimes jump out of windows or off the top of their hotels. It’s not a “fun fact” you’ll find on any Vegas-related websites, but it’s something that the Chamber of Commerce in Vegas is well aware of. The addictive nature of gambling is an arguably smaller but significant part of the mix of elements that make Las Vegas a city not quite like any other in America.
Last Sunday’s New York Times began a story on its front page concerning the downturns in Vegas and Nevada as a result of the current recession, headlined “Las Vegas Faces Its Deepest Slide Since The 1940’s.” In addition to attendance and gaming room declines, the economy of Las Vegas is suffering a collapse of its construction industry which has been a big part of the overall economic picture there. Ten years ago Vegas unemployment was 3.8 percent; right now it’s the highest in the nation at 14.4 percent. And all that’s before you talk about real crisis issues such as Cher getting older and Cirque du Soleil running out of themes for their shows.
The NY Times article cited the availability of quality hotel rooms in Vegas right now for as low as $38 a night. Compare that to one of Santa Monica’s beach hotels where rates begin at $455 a night. Of course, Santa Monica doesn’t have blackjack or a stage show featuring topless magician assistants or some dude who has surgically altered his face to look like Wayne Newton. (That dude, sadly, being Wayne Newton.) Right now, part of what stays in Vegas is that they’ll just about give you a room on the hope that you’ll drop some real money at the tables.
Not to wish long-term hardship on anyone, but there are some who view the Vegas downturn in terms of a more sustained impact. One investment advisor who tracks the gaming industry says in the Times piece “We put this in the grand scheme of things. This is a highly discretionary form of spending. People lost their savings.” For the sake of argument, one might put the Vegas downturn alongside such other “highly discretionary spending” changes as the collapse of the HumVee “Look at my giant car!” line and rapper 50 Cent admitting he is now selling off his old diamonds…at least before he buys new ones. Perhaps some of the more vulgar dimensions of trophy wealth will not return after the lessons of this downturn.
Then you have the new movement of billionaires promising to donate their wealth to charity. Bill Gates and Warren Buffett have convinced 38 other American billionaires to join them in joining The Giving Pledge initiative which encourages America’s wealthiest people to commit to giving the majority of their money to charity, while they are still living or after their deaths. Among the other billionaires who have agreed to the pledge are New York City Mayor Michael Bloomberg, oil tycoon T. Boone Pickens, media mogul Ted Turner, hotel mogul Barron Hilton, and film director George Lucas. Luke, has there been a disturbance in the Force? Has a new sobriety taken hold?
There’s no question that anybody that walks and talks like a Bernie Madoff character will now get more scrutiny by those listening to the pitch, although lightning in a bottle can still light up the room. In June the Tesla electric car company sold over 13.3 million shares of stock on the NASDAQ exchange totaling $226.1 million. I want to believe that faith is rooted in concern for a greener planet. But somebody obviously believes the cars will sell and that the money will come back, bringing with it some level of environmental improvement. Conscientious speculation, if you will, with more far-reaching impacts than doubling down at one of Steve Wynn’s possibly half-occupied Vegas hotels.
This column has been critical of state governments relying on lottery and other gambling to raise needed resources, simply from the standpoint of government appearing to endorse gambling which is known to have an addictive component for many. That certainly doesn’t imply that risk can be made to go away, or that we won’t continue to seek risk regardless of economic downturns. But Las Vegas has overbuilt and added too many hotel rooms counting on some expanding need for us to gamble our money as a component of “fun.” Maybe for some our view of fun is being supplanted by a need to feel we’re being increasingly diligent in uncertain times. “Responsibility.” It wouldn’t be the sexiest title ever for a new Cirque du Soleil show, and it would likely feature fewer people hanging in the air by their teeth. But it might be a very timely theme.
Contact Steve Stajich