June has proven to be the cruelest month for the casino industry on a number of economic fronts.

A combination of factors, including rising gas prices and skyrocketing airfares has hurt the Las Vegas tourist trade. Airline passenger arrivals are down 1.8 percent for the year and visitation from California has dropped 4.8 percent, leading to a Las Vegas room price decline of 4 percent from 2007 numbers, according to the Associated Press. Las Vegas convention business attendance is also down by at least 7 percent, according to various sources.

Meanwhile Las Vegas residents are feeling the pinch of declining real estate values and rising food costs, and are apparently responding by curtailing their visits to locals casinos. Overall, Las Vegas gambling revenues are reportedly down 3.7 percent for the year.

In addition to gambling less, Las Vegas residents and visitors appear to be spending less on dining, shopping and going to shows, a major concern to casino resort operators who now earn upwards of 60 percent of their revenue from non-gambling activities.

“This is the toughest [economic] environment we’ve faced,” Gary Loveman, CEO of Harrah's Entertainment told The Wall Street Journal. Indeed, the economic situation has proven too tough for some, with two casino resort operators - Tropicana Entertainment and Greektown Holdings - filing for Chapter 11 bankruptcy protection this year.

Investors would seem to concur with Loveman’s assessment, as evidenced by the way they are dropping out of casino-related stocks. According to the Las Vegas Review Journal, citing information from the Applied Analysis Gaming Index, nine of 10 publicly traded gambling company stocks lost value in June. Las Vegas Sands fell 19.2 percent in June to an average price of $57.38 compared with May. MGM Mirage was down 15.4 percent for the month with an average trading price of $42.22. Boyd Gaming Corp fell 14.6 percent in June to $15.14. Wynn Resorts fell 12.4 percent on the month to $91.41.

For many of these stocks, this is their lowest valuation since 2006.

Wall Street investment firms have responded in kind. Key Banc Capital Markets has downgraded its estimates and buy recommendations for MGM Mirage, Wynn Resorts and Las Vegas Sands. Moody’s Investors Service has downgraded 17 casino companies this year.

There is also fear stock prices could fall even farther, especially if the Las Vegas economic slump continues beyond this year. Gaming companies reportedly have $41 billion invested in Las Vegas resorts currently under construction, which will create an additional 30,000 new rooms by 2012.