Out of Luck? Sluggish Vegas Tries to Rebound

Dec. 2, 2008 — -- To the naked eye, Las Vegas may appear as it always has -- a shimmering metropolis in the Nevada desert. But even in the fantasy capital of the world, economic reality is gusting through.

For the last 10 years, legendary Las Vegas Mayor Oscar Goodman has seen nothing but growth. The city's population doubled to almost 2 million people, casinos raked in huge profits and hotels hosted more conventions than anywhere else in the world. But then, over the summer, things changed.

"I was sitting down having lunch with a casino executive," recalled Goodman. "And he was telling me that he had a loan for $250 million that was going to be authorized that day to make a small improvement to the casino property. And he says, 'Excuse me for second.'"

"He left, went to answer the phone, and when he came back he was absolutely ashen. I said, 'What happened? Maybe it was a personal problem?' And he said, 'No they are not lending us the money, the credit markets dried up overnight.'"

Now the entire city appears to be in recession. To find out how bad it really is, "Nightline" went on a fact-finding tour of Sin City.

Beneath the neon lights, there are signs of decline at almost every famous venue. Ticket sales, gambling receipts and hotel occupancy are all going down, and even the biggest casinos are struggling.

Harrah's has laid off 2,000 people since January, and the renowned Sands Casino is also teetering, its stock price dropping 95 percent in the last year. Sands owner Shel Adelson spent $475 million of his own money to keep the company afloat.

George Maloof made his name by attracting A-list celebrities to the ultrahip hotel-casino, the Palms. But even there, the good times couldn't last forever.

"We've been so used to growth, so much growth in the last 15 years, so when it slows down it puts people in a different mood," said Maloof. "So we're not used to this slowdown. … People are anxious; I think the whole country is anxious."