Sin City Meets the Low Rollers

Tourists have returned to Las Vegas, but they're not betting the way they used to. What it means for America's gambling capital--and the economy

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TIffany Brown / Redux

Las Vegas local, Eleanor Kochanski, center right, plays one cent machines in the Penny Lane area of The Orleans casino, in Las Vegas on Wednesday, June 26, 2013.

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At Boyd Gaming, Smith has spread his bets, buying casinos in other states and making a deal with the European company Bwin for an Internet-gambling platform for New Jersey, which has legalized that form of betting. Smith figures that New Jersey, with 9 million people, can produce $1 billion in Internet-gambling revenue. The industry has pushed Nevada to get with the program, and it recently legalized in-state online poker. "For the younger generation of customers, who participate in our product differently, it's a natural extension and not competitive to what we do," says Smith. Imagine those kids sitting around the pool with gambling apps on their mobile devices rather than social-gaming apps.

At Caesars, Loveman is working on both fronts. The company is developing the Linq, a project that it calls an open-air retail, dining and entertainment district, which includes a 550-ft.-tall Ferris wheel, the High Roller. The Linq has no casino space. "I'm trying to pull customers out of our competitors' casinos," Loveman said during the company's recent earnings call. "Linq is a sound investment in a favorable location with a very unique offering." Caesars is also creating a new firm to attract investors to its online-gambling company, which operates social-gaming platforms and betting games in Europe. He will take it wherever Internet wagering becomes legal.

And despite the carnage of the past five years, the city is once again trying to build its way out of trouble. There are new casino projects in the works, including Genting's 3,500-room Resorts World, which will open in 2016 and could increase the flow of Asian gamblers that Las Vegas craves. MGM is building a sports arena, and renovation projects at a number of hotels are ramping up construction jobs. Until 2016 there won't be many net room additions, which should allow operators to raise rates and take some pressure off operating costs.

But for the biggest players, there's still no getting around gambling. You can't run a five-star hotel with three-star gamblers. "Has Las Vegas met a headwind that it can't overcome?" asks Macomber, who has lived here for 40 years. "How much more of America will come, and how much will they be able to spend?" Happily, the sports book can give you odds.

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