( CNN ) -- The expensive casinos of Las Vegas look crowded . Tickets to the popular shows sell out . To the tourist , things look back to normal . Yet as the state 's junior U.S. senator lamented in February , `` I can tell you right now Nevada is nowhere close to a normal economy . '' Nevada 's unemployment remains the second-highest in the nation , nearly 9 % . The housing market there still languishes . New Federal Reserve Chair Janet Yellen acknowledged to Nevada Republican Sen. Dean Heller that full recovery for Nevada glimmers `` years away . '' Nevada 's troubles are more than a local concern . They reveal something important about the condition of the whole U.S. economy . Nevada makes its living from tourism , the state 's most important industry , and the tourists come -- or came -- for the casinos . Before 1990 , the state of Nevada and Atlantic City , New Jersey , enjoyed something close to a monopoly on the casino industry . As more states legalized casinos , the Nevada casino industry -- and especially the Las Vegas industry -- responded by moving up-market . Dazzling theme hotels housed lavish theatrical shows and outstanding restaurants . Las Vegas , once a rather seedy place , repositioned itself as a center of glamorous entertainment . Building the new hotels generated jobs . The people who worked in the hotels needed places to live , and building those homes generated more jobs . All that construction shaped an unusual local economy : Here was a state with low average educational attainments ( only about 22 % of Nevadans have a college degree , 45th in the nation ) , yet a median income higher than the national average . Nevada 's blue-collar prosperity was built on a faulty premise . All those glitzy Las Vegas hotels and resorts , containing typically up to 5,000 rooms each , depended on a huge influx of high-spending visitors . So long as homeowners could pay for vacations with some of the proceeds of their home refinancings , all was well . But when the refi boom stopped , Las Vegas suddenly discovered it had built a destination too expensive for its customer base . Everything else going on in the city -- the jobs in the hotels , the homes for the people who worked in the hotels , the malls where those people shopped , the homes for the people who worked in the malls -- all that crashed around Las Vegas ' ears . And now , six years after the crash , it 's hard to see a way forward from the disaster . Nationwide , the casino industry has more or less recovered from the recession . Americans left behind $ 37.34 billion in casinos in 2012 , only a shade below the 2007 peak of $ 37.52 billion . But they are spending that money in casinos closer to home . Gross revenues of Nevada casinos languish 20 % below their 2007 peaks . Because of the higher cost of Las Vegas-style amenities , a 20 % drop in revenues translates into a 50 % drop in profitability . So even as the industry nears recovery , the promise of a middle-class economy supported by gambling revenues has proven a mirage . Casino employment dropped in Nevada between 2012 and 2013 . These were the best casino jobs in the country , which explains why total national casino wages lag 7 % behind the 2007 peak even as industry revenues have nearly caught up to the 2007 level . Nor is there much likelihood of any early return to the old ways . Americans have grown cautious about gambling . While only about 14 % of Americans express a consistent moral disapproval of gambling , according to industry surveys , there has been a sharp increase in the proportion who reject gambling for themselves personally : 27 % in 2004 , 38 % today . Unsurprisingly , 2008 was the year of the biggest change of national mind on this subject . Meanwhile , those who do gamble are gambling in new ways that do n't support the style of industry for which Las Vegas is famous . Younger gamblers are attracted to online forms of gambling , which create jobs only for computer programmers . Older gamblers increasingly prefer bare-bones casinos that offer free transportation and cheaper meals . Las Vegas ' opulent palaces for the affluent gambler seem increasingly unsupportable in a country where more and more people have less and less disposable income . That 's a social trend that should concern us all , however we feel about this particular pastime .
Nevada senator says his state is `` nowhere close to a normal economy '' David Frum : The state made a big bet on the lavish casinos of Las Vegas . Since the recession , crowds at the casinos have fallen off , hurting job market , he says . Frum : Families that benefited from refinancing their mortgages have had to cut back .