The gambling slowdown that began early this year is taking a serious toll on Las Vegas, with banks, investors and private equity funds growing as tightfisted as the consumers who are gambling less in the slumping economy.

Once believed to be recession-proof, casinos are proving to be vulnerable to the economic downturn, which is striking the industry at a bad time. Las Vegas is entering its lethargic summer season, and a frenzy of grand expansion plans and private equity buyouts has left casinos laden with debt.

Now, Wall Street is treating many gambling companies like a roll of the dice, with debt default or bankruptcy proceedings looming as possibilities for some companies.

Rising gasoline prices, the housing crisis and other economic troubles are prompting consumers not just to gamble less, but to spend less at the luxury boutiques and restaurants where casinos draw most of their profits. Struggling airlines are cutting service to Las Vegas. And pressures are building on casinos that cater to local residents.

"This is the toughest environment we've faced," says Gary Loveman, chief executive of global gambling giant Harrah's Entertainment Inc.

Casinos are being pinched by less access to cash as they grapple with pre-downturn expansion plans and billions of dollars of debt. Turnaround and bankruptcy experts say they are getting more calls from casinos than they have in years.

"The volume of interest in casino turnarounds and situations has dramatically increased in the last three months," said Tuck Hardie, managing director in the restructuring group at investment banking firm Houlihan Lokey Howard & Zukin.

"The economy has fallen hard and to a magnitude people didn't anticipate. There are development projects that are having trouble even getting construction financing."