Between increased competition from other states, the growth of poker rooms and legalized Internet gambling people are running out of reasons to go to either Las Vegas or Atlantic City. It would happen without a recession, unions or nitwit politicians but those three things are just speeding up the process.
Good old Harry Reid will come up with a loss compensation plan and bail them out. The demodummies seem to be very good at that.
They will soon look to expanding other newly legal entertainments. Pot will be the new riverboat gambling for the states.
Those big casino operators in Las Vegas get profits from the proliferation of casinos all over the country, so they aren't the ones losing out. As these destination casinos get seedier and less desirable, it's people who liked the resort environment that are losing that vacation destination.