As Las Vegas Strip goes quiet, neighborhood casinos stay busy

In Las Vegas, two gaming landscapes have emerged: the Strip is ‘dead’, as some doomsayers put it. Away from the neon lights and mega-resorts, locals are keeping neighborhood casinos humming.

Business on the four-mile Strip has cooled as tourists recoil at the rising costs. Parking for a night out is $25, resort fees can reach $50, a bottle of water can set you back $26 and a coffee costs $12. That doesn’t mix well with squeezed discretionary wallets amid subdued consumer sentiment and persistent inflation.

“The perception of Vegas has become that it may not be the great value it once was,” said Truist analyst Barry Jonas, who rates Caesars Entertainment Inc and MGM Resorts International buy and hold, respectively. The two companies control the largest share of Strip properties.

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“What surprised me was the cost of lodging,” said Patrick Suter, who was in Las Vegas for a hockey tournament. He expected to pay up to $500 a night, but with prices closer to $800 or $900, he opted for a Vrbo instead.

International and domestic pressures have compounded the slowdown. Visits from Canada – roughly a third of Las Vegas tourists – fell about 20% in 2025 amid political tensions and boycotts. Immigration arrests in the US also kept people at home.

Visitor volumes have generally fallen for more than a year, and while February saw a 2.1% increase from a low base a year earlier, traffic growth remains below late-2024 levels, according to the Las Vegas Convention and Visitors Authority.

 

 

 

 

 

 

 

 

In 2025, MGM reported its first decline in Las Vegas Strip resort revenue since 2020. Caesar’s Las Vegas revenue shrank in 2024 and 2025.

Forecasts for 2026 suggest little near-term upside. Quarterly estimated visits across most major casino operators are still down, with Las Vegas-exclusive Red Rock Resorts Inc the only one to show growth, according to Placer.ai data.

“I wouldn’t expect a major upswing,” Bloomberg Intelligence gaming and lodging senior analyst Brian Egger said.

Neighborhood casinos

Away from the Strip, Red Rock and Boyd Gaming Corp have benefited from an influx of new residents, particularly retirees, and increased wages for Las Vegas Strip workers. Nevada’s lack of income tax has attracted migration, boosting spending at neighborhood casinos even as tourism softens.

Unlike Strip operators, these companies rely more on gaming than on hotels, restaurants and entertainment. This has helped.

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Red Rock’s revenue grew 3.7% last year following a 12% gain in 2024. Boyd’s core local customer base remained solid in the first quarter as residents continue to spend closer to home, CEO Keith Smith said on its earnings call. Though that wasn’t enough to offset revenue declines across its Las Vegas locals and downtown operations as lower foot traffic weighed.

 

 

 

 

 

 

 

 

 

 

 

Strip operators have responded with price cuts and bundled packages to fill rooms, as weakness hits its lower-tier properties while premium demand has held up. Wynn Resorts Ltd, where room rates are roughly double MGM and Caesars, reported growth in revenue and profit last year.

“Whether it’s the infamous bottle of water or Starbucks Coffee at Excalibur that cost $12, shame on us,” MGM CEO William Hornbuckle said on an October earnings call.

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Winning back budget-conscious travelers may require more incentives, potentially weighing on margins, Macquarie Capital analyst Chad Beynon said in an email. Adjusted profits at MGM and Caesars from the Strip fell by the largest percentages since the pandemic last year.

 

 

 

 

 

 

 

 

The slowdown is affecting small businesses. Alex White, co-owner of Yukon Pizza, said sales have fallen since October as tourist traffic weakened. Visitors typically account for about one-fifth of his customers.

“If there are no tourists to fill that 15%-to-20% gap, it’s hard,” White said.

At Omelet House, a diner just off the Strip, first-quarter sales dropped 13% from a year earlier. Owner Kevin Mills has cut overtime, paused hiring and reduced seating to manage costs. Tourists make up about half his business.

Mills, who has operated the restaurant since 1990, is counting on Las Vegas’ boom-bust cycle to turn again. Meanwhile, he would encourage price-sensitive visitors to seek cheaper options by venturing beyond the Strip – where he says a plate of bacon and eggs costs $30.

Strip alternatives

Beyond the city, regional casinos have provided steadier results. MGM and Caesars reported modest revenue growth outside Las Vegas last year, and Penn Entertainment Inc saw gains across most of its markets. Boyd’s Midwest and South segment delivered the strongest revenue growth among its units in the first quarter.

Gamblers may have traded down from Las Vegas last year, Truist’s Jonas wrote in a note.

The advent of online casinos and prediction markets brought new challenges, though concerns that they’re siphoning off customers are overblown, analysts and executives said.

Digital gambling is limited to a handful of states, and operators like MGM and Caesars run their own platforms. Prediction markets are a ‘niche’ segment, accounting for roughly 7%-8% of the market, MGM’s Hornbuckle said at a conference in March.

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Though the US is saturated with casinos, Las Vegas has also been able to draw visitors with events and shows, such as concerts at the Sphere, a massive arena that opened in 2023. “It’s a vacation,” said Citizens analyst Jordan Bender. “It’s not necessarily going to gamble more.”

If “you just want a fun weekend for two days, it’s not a bad place to go”, Suter said.

Others are more circumspect. “If the economy weakens, Las Vegas is not the place that investors flock to in that situation,” Bender said.

© 2026 Bloomberg