MGM Mirage spent the past few years planning an $ 8.5 billion hotel and casino complex called City Center, slated to open later this year. But in the future, it will adopt a more conservative strategy of trying to lure more customers to its existing properties, "and it doesn't take a $ 3 billion building to do it," Mr. Murren says.

The new approach represents a challenge for an industry that has relied on glitzy casino and hotel openings as one of its primary draws. "It's the theme-park dilemma," says Robert LaFleur, an analyst for Susquehanna Financial Group. "You've got to build a new roller coaster. Everyone likes to go but you need a reason to keep them going back."
People kept coming back to Las Vegas earlier in the decade - and spending more and more money when they did. In July 2007, visitation to the city was up 13% compared with the same month in 2002, while gambling revenue was up 53% and room rates were up 74%.

The massive investments in construction projects also boosted casino stocks as investors bet that revenue and profits would rise. Las Vegas Sands Corp. shares hit $ 144.56 in the fall of 2007, more than double their closing price on the stock's first day of trading at the end of 2004. MGM Mirage's stock nearly tripled to $ 99.75 a share during that same period.

Many companies tried to pile into the Las Vegas market. In May 2007, El-Ad Group of Israel paid nearly $ 36 million an acre for 34.5 acres of land on the Las Vegas Strip, with plans to build a $ 5 billion complex.

That all collapsed when the economy went sour. By this spring, MGM Mirage stock had lost 98% of its value and Las Vegas Sands stock had fallen 99% from its peak. Both have recovered somewhat since then. MGM Mirage is trying to work off its more than $ 12 billion in debt, while Las Vegas Sands is trying to reduce its more than $ 10 billion in debt. The plans for El-Ad's complex on the Strip never materialized.

Gambling revenue in Las Vegas this year was off 13% through July compared with the same period a year earlier, while visitation was down 6% and room rates were off 26%.

"The industry is seeking a new equilibrium," says Gary Loveman, the chief executive of closely held Harrah's Entertainment Inc. "The last period was one where people were drunk on the use of capital and used it to solve every problem. Clearly that can't continue."