Acceptance of Bradley Theory of Casino Revenues Spreads

Of course, this is because the casinos want to place the blame for their predicament elsewhere than upon themselves.

Less than a year ago, as it became apparent that the casino industry in Las Vegas and Atlantic City was suffering from the general economic situation, Sherman Bradley proposed a controversial opinion as to the cause of the problems hitting these "recession-proof" businesses. Bradley, who is senior gambling analyst at Online Casino Advisory, offered the theory that the giant land casino operators had diversified to the point that they were no longer in the gambling business, but an assortment of entertainment and retail businesses, and had thus lost the true gamblers that formed the center of their revenue stream.

At first, mainstream sources seemed to discard Bradley's thoughts. The view that the recession was just bigger than past economic depressions was accepted as cause for lost business for destination casinos.

But the idea began percolating among industry insiders. BusinessWeek made much the same case as Bradley over the summer, and gaming analysts at such firms as Goldman Sachs began to see things as Bradley does.

The Times Online published an analysis last week by Chris Ayres. Ayres notes that "The latest spin from Las Vegas is that the city's epic financial problems are only to be expected, because even Never-Never-Land is not immune from economic reality." Of course, this is because the casinos want to place the blame for their predicament elsewhere than upon themselves.

Bradley has noted that the business model in Vegas, which demanded new revenue sources in addition to the golden goose that was gambling, was doomed to fail. Ayres says, "Its (Vegas) mistake was selling whatever was left of its glitterball and spandex soul to Wall Street. And Wall Street simply did what Wall Street always does: it demanded growth, every quarter, no questions, no excuses."

And the diversification, which Bradley famously said left the casino operators adrift in the economic seas, is addressed by Ayres. "So Las Vegas mortgaged itself and double-mortgaged itself and triple-mortgaged itself, moving from gambling to conferences to fine dining to spa treatments to luxury condominiums, until the entire city had been suckered into a wager that the boom would never end."

In response, Bradley says, "I am glad to see my reasoning is enjoying more public support. Hopefully, casino operators will learn the lesson, and not forget that everything not gambling is merely an enticement, a draw to bring gamblers to their casinos."