The continuance of gambling in Las Vegas leads industry experts to think a U.S. recession is not impending.
Key Details
- Nevada casinos generated $1.2 billion in gaming revenue for February, a new record for the month.
- Casinos on the Las Vegas Strip brought in $712.5 million of the revenue, 19% more than last February, according to Las Vegas Locally on Twitter.
- Spending on the Vegas strip has been a good indicator of consumer sentiment and spending as revenues fell during the dot-com crash and 2008 financial crisis.
- Vegas also set gaming and airport records with 38.8 million visitors in 2022, a 20.5% jump from 2021, according to the Las Vegas Convention and Visitors Authority.
Why it’s news
Spending at Las Vegas casinos tends to taper off during times of economic uncertainty, but despite recessionary fears sweeping the U.S. economy, spending has remained high in Sin City.
For the last two years, many economists have warned that an impending recession threatens the U.S. economy, but predictions keep being pushed back as spending remains relatively high.
Nevada casinos had a record month for February, bringing in over $1.2 billion in gaming revenue, with over $700 million being generated on the Vegas strip.
Fund manager Jim Chanos states that the continuous carefree gambling in Vegas could suggest that fears of an imminent recession could be overblown.
Chanos shared a table on Twitter discussing that Las Vegas Strip revenue has been a good leading indicator of the U.S. Consumer. The table shows the slowdowns in spending right before the last two recessions in 2000 and 2007.
The table shows that revenues from the Las Vegas Strip surged nearly 18% in 1997, slowed to 7% in 1998, then declined in 2001 and 2002 after the tech stock burst, according to data from the University of Nevada, Las Vegas Center for Gaming Research.
It also shows winnings rising by double-digits in the mid-2000s, then slowing to 2% growth in 2007, 10% in 2008, and 9% in 2009.
Many economists have predicted an incoming recession due to the continuous rising of interest rates and record-high inflation, but Chanos believes that if a recession was indeed about to hit that Vegas casinos would not be making large profits, and U.S. citizens would be saving money.
