(Bloomberg) – Casino gambling revenue dropped 15 percent on the Las Vegas Strip in January and tumbled 19 percent in Atlantic City last month as the U.S. recession curbed spending on travel and betting.

Casino proceeds on the Strip, the biggest U.S. gambling center, slumped to USD 510.4 million in January, Nevada’s Gaming Control Board said today in an e-mailed statement. That extended the worst annual decline on record, as Las Vegas began the year with thousands more hotel rooms and fewer visitors to fill them.

Betting proceeds at Atlantic City, New Jersey, the second- biggest U.S. casino center, fell to USD 310.3 million. Revenue from tables at the seaside town’s 11 casinos fell 20 percent to USD 96 million, while slot-machine play contracted 19 percent to USD 214.3 million, the New Jersey Casino Control Commission said today in an e-mailed statement.

Visits to Las Vegas are expected to decline 3 percent to 4 percent this year, Rossi Ralenkotter, chief executive officer of the Las Vegas Convention & Visitors Authority, said in a Feb. 4 interview. Passenger flight capacity remains almost 15 percent less than a year ago, he said. Meanwhile, developers are preparing to open more than 13,000 new hotel rooms in 2009.

“In Vegas the problem is really not so much in the gambling side of the business, but more so on the hotel side,” Robert LaFleur, an analyst at Susquehanna Financial Group, said today in a Bloomberg Television interview.

“Room rates had gotten exceptionally high,” LaFleur said. “It’s a huge source of profitability, and right now we’re in a very, very damaging rate war on the Las Vegas Strip.”

Steepest on Record

Revenue for all casinos in Nevada retreated 15 percent to USD 908.6 million in January. Monthly proceeds for Clark County, which includes downtown Las Vegas as well as the Strip, tumbled 16 percent to USD 777.5 million.

Last year’s 11 percent fall on the Strip was the steepest since record-keeping started in the mid-1980s. Atlantic City’s gambling revenue tumbled 7.6 percent in 2008, its worst annual decline, compounding a 5.7 percent slide in 2007 after nearby Pennsylvania and Yonkers, New York, allowed slot machines.

Casino owners Harrah’s Entertainment Inc., Boyd Gaming Corp. and MGM Mirage began an express weekend train connecting Atlantic City to Manhattan’s Penn Station last month to boost visits. New York is at least two hours away by car.

All 11 casino properties posted gambling revenue declines last month. Slumping play has already persuaded Atlantic City’s council to postpone a casino smoking ban for another year.

‘Screaming Deals’

“There’s been a lot of construction activity in terms of building out new hotels” in Las Vegas, Orbitz Worldwide Inc. Chief Executive Officer Barney Harford said in an interview last month. “That was happening in the run-up to this tough economic environment, so capacity was moving in one direction and then as demand started to go downwards, you really felt a challenge.”

The glut of rooms has led to “some screaming deals out there to go to Vegas,” Harford said. “People are really trading up to four-star and five-star properties, because the folks are going to go down for a long weekend or something, and they can afford to do that at the current rates.”

Total visits to Las Vegas slid 4.4 percent last year to 37.5 million people, according to the visitors authority.

Passenger traffic at Las Vegas’s McCarran International Airport declined 7.7 percent to 44.1 million in 2008 from a year earlier, the second-biggest annual decline since data were first compiled in 1960, Clark County Department of Aviation figures show. The airport recorded its biggest annual passenger slump, 8.1 percent, in 1981. Passengers dropped 16 percent in January.

Las Vegas added about 8,000 hotel rooms last year, bringing the total to 140,000. That will swell again in 2009 as MGM Mirage and Dubai World’s CityCenter and Fontainebleau Resorts LLC’s new casino resort open.

Strip developers have indefinitely suspended construction on four projects that were to have added 6,900 hotel rooms and condominiums, according to the visitors authority.