A fantasyland, a Pinocchio's detour, a neon daydream of excess: that was Las Vegas during the decade of the 1970s, and tourism increased by 74 percent.
Change came in 1981, with a 1 percent decline from the 11,941,524 visitors of the year before--the first decline since gambling was declared legal in 1931. Last year the total number of visitors was down 2 1/2 percent over 1980--just as 3,000 new hotel rooms, financed at high interest rates, brought the total number of hotel and motel rooms here to more than 50,000.
The rhythm of the slot machines slowed, and gaming tables could be seen covered even on Saturday night. In the past three years six casinos have closed their doors, and the landmarks of the Strip stand threatened: the Aladdin Hotel, in financial crisis; the Riviera, behind in payments to the state retirement fund; The Dunes, under new ownership after going $10 million in the red; the Sands, which defaulted last month to its parent, the Summa Corp.
There is no shortage of explanations--the disappearance of discretionary income for vacationers, the rise of Atlantic City, cutbacks in air service here, the devaluation of the Mexican peso, a dulling of the competitive edge among Las Vegas casinos, bad publicity from hotel fires, increased gasoline prices.
Las Vegas, which has always known what it is, now knows it must change.
What it does not know is what it must become.
"The Old Las Vegas is gone," says Fred Lewis, vice president of Howard Hughes' Summa Corp. and immediate past president of the Chamber of Commerce. "The new Las Vegas will have to be great to attract greater numbers of people."
"What happened was that about 1 1/2 years ago we got hit with something that never happened to us before--a recession. It used to be that Mom and Dad made two trips a year. One with the kids, and then for the other one they'd park the kids with Grandma and come here. Now their discretionary income doesn't allow two trips, but they still have the kids. Since Las Vegas doesn't have the image of kids, we lost out.
"But in the meantime, we were realizing the value of special events, because they can attract the whole family. We're on the PGA Professional Golf Association tour now. We have rodeos and fly-ins and we're planning a marathon. We're looking for someone to come in and build a theme park, a Disneyland of the Southwest. We're busting our hump to get some Olympic events here in 1984.
"We want to compete with the Indianapolis 500," Lewis said. "That's wholesome. Anyway, as more and more states go to casino gambling, the quality is bound to increase. It'll no longer be seen as scuzzy. It'll be Harvard MBAs."
In the cool internal stairwell of a large casino, a local businessman considers--with amusement, if not sarcasm--the prospect of such a new Las Vegas. In the past, this businessman associated with known criminals, but he is a millionaire many times, and his opinion is much respected here. He is in the casino business--the business on which Las Vegas was built, but which he believes is not a business meant to attract families.
"Everybody around here lately has decided Las Vegas is a great vacation spot, not just a gaming spot," he said. "If people come to believe that, then believe me, they will go elsewhere. They will find another place where Lucky Luciano was, or Two-Eyed Somebody, or at least Frank Sinatra was. They want that.
"If the point of view is morality, well--that's just not Las Vegas. And you can't create an ersatz morality. It won't work." The Competition
It is Atlantic City, with 40 million people within 100 miles, that has made the most direct assault on high-rolling Las Vegas.
"Initially, we said that only 8 percent of gamblers came from the East," said Alan Duncan, vice president for investments of Dean Witter Reynolds here. "We knew we'd lose a good proportion of that. That has certainly occurred. It would appear, furthermore, that the figure of 8 percent was low. What hurts is that so many of them were high rollers."
In 1977, Atlantic City, its once-famous boardwalk forgotten, was the rotten back porch of New Jersey; it drew fewer than 5 million visitors. That year 10 million tourists went to Las Vegas, where gaming revenues rose 20 percent over the year before.
Gambling began in Atlantic City in 1978. Last year it registered 23 million visitors, more than any other resort in the United States.
The contrast in styles between the two cities remains great. Atlantic City, part new-grown and part grown to seed, bustles with busloads of day-trippers (it has only 3,000 hotel rooms). Las Vegas, dry-cleaned by the desert, remains a perpetual movie set; and the appropriate vehicle is the red Eldorado convertible (75 percent of visitors arrive by car from California). The signal difference for gamblers, however, is that the tables of Atlantic City are crowded, and those at Las Vegas are not.
A high roller is a gambling patron who can be counted on to put at least $10,000 in play. Each casino maintains its own list of such players, with credit information and personal gaming history. Periodically, the casino sends out notices to lure these coveted clients, offering airfare, use of a limousine, room and board and a range of personal services without charge. But high rollers are a busy lot, and the acceptance rate may only be 3 percent.
Once, such an offer from Las Vegas was an offer high rollers couldn't refuse. Now there is Atlantic City, and Las Vegas also needs a "special event."
The "special event" that taught this lesson to Las Vegas was the Larry Holmes-Muhammad Ali prizefight of May 29, 1979, organized by Caesars Palace. Tickets were difficult to obtain, and they were expensive--but they were offered to high rollers for free. The high rollers took the bait, and in the curious economics of Las Vegas, everybody was happy.
"I am really in the business of giving hotel rooms away," says Bob Stupak, the owner of Vegas World Casino. "I have 400 rooms, and the best thing in the world for me would be that all 400 rooms are comped filled with complimentary bookings .
"I would gladly spend $9,000 to get a $10,000 player to come for the weekend. My profit would be $1,000, or 10 percent. Maybe that doesn't sound like much at first. But many people will put $10,000 into a bank and wait a year for that 10 percent return. I expect to get mine in two days. If I can do that 52 weeks a year, my profit will be 520 percent."
Stupak, who bills himself as the "Polish Maverick" and calls gambling "a sickness," believes its value is in adding spice to adult life. "I don't even like to see a kid walk through my casino," he says. "Let them learn their vice someplace else." But the odds on predictable profits in the casino business--where a slot machine set for a 97 percent payoff still returns a handsome income--were not lost on large corporations such as Holiday Inn, MGM and Hilton, each of which now operates a lavish hotel-casino here.
When the recession hit, it is widely held here, the corporations exacerbated the situation by raising prices--and they weren't the only ones.
"It's the way the corporate mind works," Stupak claims. "Every department has to make money. Some casinos are charging $3.50 a drink now--a drink that you ought to just nod for and they bring it to you. That's where Las Vegas is changing for the worst. The big corporations have betting limits. In my place, I'll bet you anything. I'll go half my bankroll. Las Vegas ought to have pizazz. What's pizazz? Me."
Stupak ran for mayor this year on the claim that a lack of pizazz was killing Las Vegas. He lost, but he was noticed. The Stars
The "Entertainment Capital of the World," as Las Vegas bills itself, developed its own brand of stars. They were as diverse in talent as Frank Sinatra, Don Rickles and Lola Falana, but what they had in common was that they could fill a hall. Many, drawn by repeat bookings, stayed on as homeowners--among them Shecky Greene, Juliet Prowse, Peter Lind Hayes and Mary Healy, Steve Rossi, Liberace, Jerry Lewis, Wayne Newton, Phyllis McGuire, Orson Welles, Robert Goulet, Redd Foxx, Buddy Hackett, Debbie Reynolds, Rip Taylor, Barbara McNair, Charo and Paul Anka.
But entertainment in Las Vegas is also changing.
"We've gone out of the star business," says Fred Lewis. "What happened was that after a while singers were asking $90,000-$100,000 a week. Comics were asking $150,000-$300,000 and getting it. Then when you put them in an 800-seat showroom they brought in only 400 people. There just aren't many performers left who can fill a room--Kenny Rogers, Dolly Parton and Sinatra being a few of the exceptions."
The big exception of the moment is "Siegfried & Roy" in "Beyond Belief," a two-hour combination magic show and topless revue that opened in 1981 and has been sold out for most performances since.
"I love it here--we're building a big house and it's almost finished," said Siegfried in his lavish dressing room after a performance in which, once again, an elephant had disappeared before the astonished eyes of 900 persons paying $25.50 a head twice nightly and three times on weekends at the Frontier Hotel. In the lavatory of Siegfried & Roy's dressing room is a live black panther; behind a cedar closet is a door to a cage with three tigers. They are a matched set of Las Vegas success stories--one blond, the other ebony-haired, and they're enjoying themselves. "It really gets on my nerves when people say Las Vegas is dying," said Roy.
Siegfried & Roy are the creation of Irvin Feld, the Washington entrepreneur who also owns Ringling Bros. and Barnum & Bailey Circus. Despite their success, Feld says business in Las Vegas is "lousy," and "the place needs somebody to come in a do a first-rate PR job on it." His own contribution: For the early show Friday night, the statuesque women of "Beyond Belief" don what Feld calls "beautiful brassieres."
Backstage with Paul Anka, who was completing a three-night engagement in place of Diana Ross as a favor to Caesars Palace, the mood was more critical. Anka, who lives here with his wife and six daughters, is a nightclub owner as well as a songwriter whose credits range from "My Way" to the "Tonight Show" theme.
He believes that Las Vegas got lazy as it got fat ("there hasn't been a new idea here in years"), and he has no patience with the stars whose salaries killed the golden goose.
"This business of paying superstars $350,000, that's crazy. That means a big hall, and two shows a night and all you do is ruin your throat. You saw my act? How can I do that twice a night? I'd have nothing left. I don't need it--I'll gross $7 million this year.
"Besides, who's going to do it? Newton kills himself, trying to make up for talent with a four-hour show. Sammy Davis? Suzanne Somers? Come on. No, you've got to give the people value for their money. The prices shouldn't be so high, food prices, drink prices . . . Let them make money at the tables."
Anka still draws, with a gigantic performance in the Vegas style. He sang "Diana," "I'm Just a Lonely Boy," "Puppy Love" (written at 7 a.m. on a Saturday when he was 16, after his mentor Feld thus characterized Anka's affection for Annette Funicello), as a movie screen showed 1950s teen-agers in emotional disarray. Thereafter he moved among the crowd, kissing the women and taking his own picture with their flash cameras. His performance ended with fireworks.
Afterward he appeared at a Caesars Palace 21 table, demanded that only one deck of cards be used, purchased $1,000 in chips and talked two companions into joining him at $300 each. While security guards kept the gawkers at bay, Anka managed all the betting, counting cards aloud as his dealer dealt and dealt again.
In 10 minutes, Anka and his pals were cleaned.
So was returned unto Caesars Palace what was Caesars Palace's. What the Customer Wants
Perhaps if Las Vegas were still as wicked as its reputation, it would not have to change.
The fact is that gambling in America is no longer the social adventure it once was. It has become, if not a widely admired industry, at least widespread. Connecticut, that former bastion of Yankee values, now permits bingo, state lotteries, dog racing, jai alai, off-track betting and horse racing (though no horse racing tracks currently operate in the state). There are 485 gambling parlors in North Dakota. Nineteen states operate lotteries, and business flourishes despite the lowest payoff in legal gaming. Only four states--Hawaii, Mississippi, Indiana and Utah--permit no gambling of any kind.
Las Vegas may have been caught napping, but it is now fully awake. It has faced the reality of increased air fares and increased competition, had some bouts with bad luck in the form of hotel fires and ill-timed expansion, and felt the recession trim its weakest limbs and perhaps cauterize the wounds.
For other cities, these would be devastating blows from which it might take 50 years to recover, if recovery came at all. Many Northeast textile towns have quietly died, the South is peppered with ghostly planations, the West with abandoned mining towns. The little industrial suburb of Rahway, N.J., was once called "the city of the living dead" after the rise of the automobile devastated its central industry--the manufacture of buggy whips.
Las Vegas, a Flexible Flyer among inflexible cities, does not have those problems. It does not have an identity defined by textiles, or cotton, or gold, or buggy whips. It has an identity defined as the entertainment capital of the world. What Las Vegas wants to give you is whatever you want.
One of Summa Corp.'s ideas for the new Las Vegas is the $3 million Desert Inn Country Club & Spa, "designed to rival Baden-Baden" in Europe. The spa, an "entry in the ever-increasing popular market of outdoor recreational activity and physical health emporiums," will feature hydro- and thermo-therapies, including fango (wrapping with paraffin packs), Saltglow (body massage with sea salt and fine oils) and luffa massage (with mint soap). Gambling is not even mentioned in the prospectus.
Tony Marnell designed it. His father was a mason who came to Las Vegas in 1952 to help build the Sands Hotel. Tony Marnell grew up here, and went away to college at the University of Southern California in 1967, and came back to found Marnell and Correo, architects with credentials and connections. He is 34. His firm has also designed major additions to the Desert Inn, Sands, Frontier and Westward Ho, and the aerial moving sidewalks of Caesars Palace.
When he went away to school, Marnell says, Las Vegas was in the "flocked wallpaper" stage of its esthetic development.
"Now it is in a kind of transition--going to the next level, if you will. But it has always been the original fantasy island, and it will still be. Yes, there are casinos in trouble. But actually, this is the time to buy. If you think about it, these are the times that make rich men."