On this day in economic and financial history…

The rich silver mines of Nevada withered as the Great Depression dragged on, leaving the desert state in dire straits as its people picked up and moved in search of elusive opportunities. The Nevada legislature, in a desperate bid to attract fresh capital to its sparsely populated state, finally legalized gambling on March 19, 1931. It was a decision that would have a lasting impact on the state’s character and composition and that continues to affect the global gaming industry to this day.

Within two months, the Meadows Club casino (appropriately named, as “Las Vegas” is Spanish for “the meadows”) opened in Las Vegas. It caught fire and was gone from Vegas by 1942, by which point the city’s famous Strip was taking shape with the construction of the Last Frontier and El Rancho Vegas. After the war, a growing American middle class helped give rise to a number of Vegas gaming icons, including the Sands (opened in 1952 and since replaced by the Venetian Sands flagship casino of Las Vegas Sands after its acquisition by a Sheldon Adelson-led investment group), the Desert Inn (opened in 1950 and the site of Wynn Resorts‘ flagship casino since 2005), and the Riviera (opened in 1955 and still in operation).

MGM Resorts‘ Mirage, which cost more than $600 million to build and which was financed by Wall Street junk bonds at the height of the Drexel Burnham Lambert era, ushered in the era of the modern megacasino when it was completed in 1989. This 100,000 square-foot, 3,000-plus room edifice pushed other casino operators to demolish old landmarks to make way for properly competitive megacasinos of their own. Total room inventory in Las Vegas has more than doubled since the Mirage’s completion to nearly 150,000 rooms as of 2009. That year, despite a deep recession, more than 36 million people visited the Las Vegas region to spend nearly $9 billion on gaming activities — a rate of just more than $240 per person.

Five years after the crash began, Nevada has still not recovered its to pre-recession levels. From 2007 to 2012, the total statewide room inventory increased from 178,000 rooms to 195,000 rooms, but total visitor volume dropped by 5%, airport traffic declined by 13%, and both gross gaming revenue and the average daily rate per person dropped by more than 15%. However, the Las Vegas-based gambling industry had long since expanded internationally, particularly to Macau, which generated a collective $38 billion in gaming revenue across 35 casinos in 2012 versus Nevada’s roughly $11 billion in gaming revenue — much of which comes from more than 100 casinos in Las Vegas alone.

For many companies, successfully capitalizing on a booming Chinese economy is like winning the jackpot. That’s indeed the case for gaming company Las Vegas Sands, which made a big …read more
Source: FULL ARTICLE at DailyFinance