Nevada bracing for further slump in revenues

The loss of jobs tied to Echelon marks a second recent comeuppance for Las Vegas, said Brad Milsaps, a Sandler O'Neill & Partners bank analyst who tracks its economy.

The first was the crash of its housing market. Once one of the hottest in the nation thanks to torrid growth and a speculative frenzy, Las Vegas now is awash with foreclosures. Real estate information service RealtyTrac recently ranked the Las Vegas' market as the second-worst in the nation in the third quarter in terms of foreclosure activity.

Now amid slowing consumer spending the area's economy is paying the price for betting so much on tourism's sustained strength, Milsaps said.

"It's highly dependent on discretionary income," Milsaps said. "With the state of the economy there is just less of that to go around ... There has to be another industry there aside from casinos to get them out of this slump that they're in."

(Additional reporting by Deena Beasley in Los Angeles and Mark McSherry in New York)

(Reporting by Jim Christie)