Las Vegas Strip casino gambling revenue tumbled 23 percent in December, capping the worst annual decline on record, as the city enters the second year of the U.S. recession with thousands more hotel rooms and fewer visitors to fill them.

Gambling proceeds in the biggest U.S. gaming center slumped 10.6 percent to $6.12 billion last year, the steepest decline since data started being compiled in the mid-1980s.

Last year was bleaker than 2001, when the Sept. 11 terrorist attacks frightened travelers and led to a 2.1 percent drop, said Frank Streshley, an analyst at Nevada's Gaming Control Board.

December's gambling proceeds of $474.2 million represent the Strip's 12th straight monthly decline, according to data released yesterday by the state gaming regulator in an e-mailed statement.

The number of Las Vegas visitors is expected to fall 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 in New York. Passenger flight capacity remains almost 15 percent less than a year ago, he said, as developers prepare to open more than 13,000 new hotel rooms in 2009.

"The marketplace is very, very volatile," Ralenkotter said. "Over the last 30 years, we've seen one or two of these challenges happening, but we've never collectively had this many parts of our economy and our lifestyle being impacted all at the same time."

VISITATION DOWN 3.8%

Revenue for all casinos in Nevada retreated 19 percent to $888 million in December. Monthly proceeds for Clark County, which includes downtown Las Vegas as well as the Strip, fell 18 percent to $771.8 million.

Total visitation slid 3.8 percent in the 11 months through November, to 34.7 million, the latest official LVCVA data show. Strip gambling revenue may fall by a mid-single-digit on a percentage basis or "maybe a bit more," this year, Deutsche Bank AG's Las Vegas-based analyst Bill Lerner said on a Jan. 9 call.

Passenger traffic at Las Vegas' McCarran International Airport slid 7.7 percent to 44.1 million in 2008 from a year earlier, its 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 of 8.1 percent in 1981.

ROOM RATES FALLING

Las Vegas added about 8,000 hotel rooms last year, bringing its total to 140,000. That will swell by more than 13,000 in 2009 as projects including MGM Mirage and Dubai World's City Center, and Fontainebleau Resorts LLC's new casino resort open, Ralenkotter said.

Las Vegas room rates have declined the most since Expedia Inc.'s Hotwire unit began eight years ago and are still falling, said Clem Bason, president of Hotwire. Hotwire sells cut-price travel by allowing travelers to opt for unnamed hotels that fit their criteria. By withholding the names during booking, Hotwire sells leftover rooms without hurting properties' advertised rates.

"Prices are declining faster now than they were after 2001," Bason said. "You have this collapse in demand just as they were going into this period of massive overbuilding. We have 5-star Vegas hotels for under $100 a night through much of the spring."

The additional rooms come even as Strip developers indefinitely suspended construction on four projects already under way last year that were to have added 6,900 hotel rooms and condominiums, LVCVA data show.

MGM Mirage, the biggest Strip operator with 10 casinos, rose 8 cents to $5.60 in New York Stock Exchange composite trading yesterday, while Las Vegas Sands Corp. climbed 23 cents, or 6.1 percent, to $3.98. Wynn Resorts Ltd. lost 1.17 cents, or 4.2 percent, to close at $26.41 in Nasdaq Stock Market trading.

Gambling revenue in Atlantic City, N.J., the second-biggest U.S. casino center after Vegas, fell 7.6 percent last year, its worst annual decline, compounding a 5.7 percent slide in 2007 after the recession exacerbated losses to nearby slot machine competition in Pennsylvania and Yonkers, N.Y.