The taxi queue outside McCarran Airport in Las Vegas resembles the line for a Disney ride: hundreds of people snaking between ropes, waiting to get to a place where all normal rules are suspended.

As the line begins to thin, hundreds more travellers, both workers and tourists, are disgorged from the airport ready to head towards the huge, glittering hotels in the distance.

It seems as if the credit crunch that has wiped billions from stock markets across the world and wrought havoc from Manhattan to Moscow has stopped at the mountains that protect Sin City from the vagaries of the global economy.

However, all is not as it appears in this gilded, grown-up fantasy land. Despite the queues, Vegas has not escaped the economic troubles. Some say that things have not been so bad since the Rat Pack were in town - that's Frank and Sammy, the real deal, not George and Brad.

One casino chain has lost more than $50 million (£34 million) in the past quarter alone. The mammoth building projects that promised to add thousands more hotel rooms are slowing and future projects have been put on ice. Takings are down about 15 per cent on last year.

Taxi drivers are always a good barometer of the economy. Davey, who has been driving the hopeful and desperate for 25 years in Vegas, says that things are as bad as he has ever seen them. “Compared to last year, trade is down about 30 per cent. There's just not the same amount of people out there.”

Customers are also more frugal. “Rather than just giving me a $20 for a $16 ride, they will make sure they have the exact change.”

Fewer Americans are holidaying in Vegas and, as the pound continues to slide against the dollar, British tourists are thinking twice about going. Paul Charles, Virgin Atlantic's communications director, says that he has seen a 2 per cent rise in the number of passengers travelling to Las Vegas compared with last year.

But he predicts tough times ahead: “Vegas is a place where people go to spend disposable income, and next year they will not have as much, so may choose to have a beach holiday instead. Vegas is going to have to work hard to attract tourists,” he says.

Other workers in Vegas tell the same story. It seems that Californians, a four-hour drive away, are staying at home more than most, leaving the hotels emptier than they should be, especially at weekends.

But hotels in Vegas cannot be judged like others across the world, which make money from their room rates and, maybe, convention centres. In Vegas, it is all about food and beverage, entertainment, retail and, of course, gambling.

As a result, hotels all along the Strip are offering more deals than ever before, with rooms costing up to 50 per cent less than a year ago. Other incentives include free gambling money, spa and food vouchers, discounted golf and free passes to some of the entertainment on offer.

The evidence of a slowdown is available for Vegas regulars to see: the restaurants are not as full, the gambling tables easier to get to and the high-rolling rooms nowhere near as crowded.

Richard, from Canada, is playing poker for small stakes at the Mirage, his fifteenth trip to Vegas in ten years. “It's Saturday night and this place should be jammed with people, but even these tables are not full and it's relatively cheap to play,” he says. “I'm not sure what's happening at the Wynn or the Bellagio, where you can get bigger games, but from what I have seen it's nowhere near as busy as it should be.”

If the big whales are in town, they are not playing. In the private rooms that cater to those who think nothing of betting tens of thousands on one hand of poker or blackjack, dealers stand ready behind empty tables.

Alan Feldman is senior vice-president of public affairs for MGM Mirage, part of the MGM Group that owns ten hotels on the strip, including the upmarket Bellagio, Circus Circus, the Mirage, Monte Carlo, Excalibur and Treasure Island.

He has been in Vegas for 19 years. “In terms of special deals and packages I have never seen so much promotional activity,” he says. “There is a misnomer about Las Vegas that it is recession-proof - it has never been that, but it has been recession-resilient.”

Mr Feldman says that some MGM Mirage properties, such as Vegas Vegas and the Bellagio, are reporting occupancy rates of 93 to 94 per cent, but guests are not paying the full room rate:

“In the last quarter, MGM Mirage reported decreased revenue per available room of 10 per cent. Over our 40,000 rooms, that's a big chunk of money, almost $53 million in the quarter alone.

“We are basically seeing that level of downturn across the board, in gaming, food and beverage, and entertainment revenue. Last year people were buying expensive bottles of wines but this year they're buying less expensive bottles, or just ordering a glass or two.”

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