Recession is slowly beginning to lose its' strangle hold on the economy in many cities in the USA but not in the gambling capital Las Vegas. Sin City is going through the worst phase in its' history since the 1940's when the first major casinos were built in the middle of the Nevada desert, says NY Times.

Even though casino owners are hopeful of gambling revenues rebounding, the other economic pillar of Las Vegas and Nevada, namely constuction seems to have collapsed altogether.

According to NY Times, Nevada's unemployment rate of 14.4% is the worst in the country. Ten years ago that same figure was just 3.8%. August was the 44th consecutive month when Nevada was the state with most housing foreclosures.

"It’s been in bad shape before, but not this bad,” David G. Schwartz summed it up for NY Times. Schwartz, director of the Center for Gaming Research at the University of Nevada, says the gaming revenue has been in decline for the past three years.

In past economic recessions Las Vegas was the first city in the country to feel the heat but it was also the first to bounce back. This time it's different: when Americans have lost not only their jobs but the value of their retirement funds and homes, they are not spending on travel and leisure anymore.

The only thing that seems to stand up to the economic slump in Sin City is the CityCenter. Built by MGM Resorts and the government of Dubai, the maze of hotels, casinos, shopping malls and spas cost a staggering $8.5 billion.

The December 2009 opening of the CityCenter couldn't have happened at a worse time for the city. With the CityCenter came 5,000 new hotel rooms to compete for visitors at a time when other establishments were already struggling to bring people in. And when the new Cosmopolitan opens on the Strip in December, there will be 2,500 more. It's no wonder that you can now get a room in Vegas for as low as $38 per night.

The newest major threat for the Las Vegas casinos is internet gambling. Most though not all of the major casino owners are still opposed to regulating online poker and other forms of online gambling, and they form a powerful lobbyist group in Washington, DC. Read more about it on New York Times.