By William Spain

The economic meltdown is continuing to batter the casino industry, with the two largest U.S. markets -- Las Vegas and Atlantic City, N.J. -- posting sharp declines in gambling revenue.

On the Las Vegas Strip, the overall take fell 23% to $474 million in December, according to the Nevada Gaming Control Board.

Table game revenue was off 30% at $239 million, with a volume decline of 16% and a lower "hold" percentage -- the amount the house typically wins. Slot machine revenue was off 14%, and total gambling volume fell 15%.

For the fourth quarter, gambling revenue on the Strip was down 22%, while the full year 2008 saw a decline of 10%.

Fewer people are coming to Sin City, and those who do arrive tend to stay for shorter periods and spend less money when they do. According to the Las Vegas Convention and Visitors Authority, visitation to Las Vegas in December was down almost 11% to 2.7 million -- the fourth month in a row of double-digit declines.

However, as the year did not start nearly as poorly, total 2008 visitation fell a relatively milder 4.4%.

Las Vegas hotel occupancy declined 9.90 percentage points to 73.3%, as weekend occupancy levels drooped to 82% and midweek occupancy fell to 70%. The average daily rate plunged 14.2% to $96.39.

The rest of the Silver State fared little better, as statewide gambling revenue plunged 19% in December.

"The continued decline in visitation is not a surprise, considering the culmination of financial crisis this fall," Bill Lerner of Deutsche Bank wrote in a note to investors. "In addition, Las Vegas is likely feeling the impact of reduced airline capacity, as evidenced in the sharp passenger declines at McCarran [International Airport]. Finally, we note that the declines in both air passengers and auto traffic in 2008 exceed the visitation decline."

Joe Greff at JPMorgan Chase attributed the fall to a combination of "soft spend, given a deteriorating macroeconomic environment," and the "decrease in visitor volumes in the month despite significant hotel room discounting."

"The results are actually weaker than they appear, given the accounting method used for slot revenue recognition that counted slot win from Nov. 29 and Nov. 30 in the December results," Greff said.

The news did little to boost the shares of major operators, most of which are trading at just a fraction of where they were this time last year.

MGM Mirage (MGM) slipped another 2.2% to $5.40, while Wynn Resorts (WYNN) fell more than 4% to $26.39, and Boyd Gaming (BYD) edged down about 1% to $4.94.

Las Vegas Sands (LVS), set to report its fourth-quarter numbers after the close of trading Wednesday, was the sole beneficiary, rising 3.35% to $3.88. Of course, in February of 2008, it was still hovering at around $100.

On the other side of the country, Atlantic City's gambling revenue fell 9% in January, according to the New Jersey Casino Control Commission.

Atlantic City slot wins were down 10% and table wins fell 9%, even when benefiting from more weekend days in the month and an easy comparison with the 10% drop for the same month of 2008.

-William Spain; 415-439-6400; AskNewswires@dowjones.com