Newest competition for Las Vegas: New York State

New York State may be well on its way to opening up as many as 9 full-blown Las Vegas style resorts and casinos. No doubt the big Vegas casino companies will want to get in on the action, but the action in New York will definitely mean fewer gamblers and their dollars coming to Nevada.

The big Vegas casinos operate on "economies of scale," and when the money and the people aren't coming in great numbers, the economies of scale get cut back.

For example, you can't have a showroom with Celine Dion performing on a regular basis in a small town in Nebraska because the economy of scale would not support it. You need the traffic that comes to Las Vegas to create the economy of scale that allows for the Celine Dion schedule.

As you diffuse the gambling base you also will lose the big attractions -- not completely, but perhaps enough to notice.

You also make the casino companies skimp on comps, gaming paytables, promotions.

People gneerate profits. Remove some of the people and the profits have to fall. Profits build the big casinos and keep them big.

The pie is getting sliced into thinner pieces.