The Rise of Las Vegas Bar Culture

How booze—much like upscale rooms and fine dining—is helping to fuel the casino industry’s bottom line

For about as long as this town has been open for business, it’s been known as a place where people gamble and drink. But with the former now widely available elsewhere, Las Vegas has shifted its marketing focus to the latter. For certain, drinks—and those who mix them—have become yet another attraction.

Just look at the numbers: Since 2005, the average beverage spend per visitor has increased by 60 percent, more than twice the rate of the second fastest-growing segment: food. That increase reflects both the greater volume of spirits being poured as well as the increased cost for cocktails.

And that increased cost is about much more than a bottle of domestic beer going from $8 to $10. It represents a shift toward artisanal, handcrafted, choose-your-buzzword cocktails on the Strip—a shift that’s consistent with other former loss-leading casino departments.

Remember, there was a time when guest rooms were nothing more than dorm rooms for gamblers; it’s long been suggested that, initially, Las Vegas hotel rooms were deliberately made unappealing to drive visitors back into the casino (as if leaving the room could magically put more money in their wallets). Starting with The Mirage in 1989, developers began to hand the room keys to renowned designers, who would create spaces that guests wanted to stay in. Fast-forward to today, when such design is a key differentiator for many Strip resorts.

Similarly, casino restaurants once placed a premium on fast, inexpensive food. There were early exceptions, to be sure—the Dome of the Sea at the Dunes and Bacchanal at Caesars Palace come to mind—but for the most part, Las Vegas casino dining was intentionally unimpressive. Then, in the post-Mirage competitive sprint, chefs became celebrities (and vice versa), and both the quality and cost of the average meal increased. The ultimate expression of the upscaling of the casino dining experience can be seen in the buffet. Once the institutional-quality dining workhorse, buffets are now often more about small plates than Salisbury steak.

Entertainment has evolved along a parallel path, with impersonators, revues and legacy acts giving way to star headliners and extravagant production shows. In the hyper-competitive market of the Strip, it boils down to making every square inch of the casino produce as much revenue as possible. The old cliché that our billion-dollar palaces weren’t built on people regularly beating the casinos remains true. But they aren’t kept open by the take from slots and tables alone. In today’s Las Vegas, there are no loss leaders—every department is expected to pull its own weight.

Not long ago, bars might have had a difficult time following that mandate. After all, casinos traditionally give away alcohol to gamblers. But the shifting patterns of visitor behavior explains the increased cost (and quality) of casino drinks. As recently as 2007, 85 percent of adult visitors to Las Vegas did at least some gambling while they were in town—and probably expected to drink for free. Last year, only 71 percent did.

This rise of Vegas bar culture coincides with the (relative) decline of gambling visitors. If the focus of your Vegas vacation is going to be drinks and not dollar blackjack, you probably don’t want to guzzle the same well drinks you do back home. And that’s where handcrafted artisanal libations come in. They are filling the same niche as dinner at Giada’s or tickets to O—a Vegas-only treat that visitors can brag about when they return home.

So the increased emphasis on signature drinks—such as Patricia Richards’ timeless Sinatra Smash at Sinatra in Encore—makes perfect sense.

Another huge revenue boost for beverage departments: the bottle-service boom, where $450 bottles of $30 liquor buy valuable table real estate at night- and dayclubs. Sure, the focus in clubs is more on DJs and ambience, but (on paper at least)guests are paying for the hooch.

Drinks, then, like rooms, dining and entertainment, are more important to Las Vegas’ bottom line than ever before. No longer just lubricating gamblers, they are, in many cases, the main attraction. And with gaming revenues staying flat and more visitors eschewing gambling altogether, we can expect to see an even greater emphasis on bar design, menu selection and mixologist recruiting—both on the Strip and Downtown.

Never forget that our casinos always pivot to where customers want to spend. And for now, they want to spend on booze.

David G. Schwartz is the director of UNLV’s Center for Gaming Research.