Published febrero 19, 2020
Moody’s Upgrades US Casino Market to ‘Not Quite So Bad’
Moody’s Investors Services has some good news for the American gaming market. Sort of.
Us casino revenues are up somewhat, but Moody’s warns that operators don’t have any more room to cut costs.
The usa land-based casino industry is showing signs of improvement, but only a bit, according to Moody’s, which this week upgraded its assessment of the market from negative to stable.
The firm said, with an average growth, year-on-year, of 4.1 percent across those states in May, gambling revenue rose in all of the 18 states that are tracked by Moody’s, except for Connecticut and New Jersey.
Moody’s cited a positive trend of revenue growth, cost-cutting, and reduced market ‘cannibalization,’ whereby organizations poach business from each other, as contributing facets.
The firm believes there is space for modest growth, and that revenue will increase between zero and 2 percent each month, year-over-year, for the next 12 to 1 . 5 years, that could result within an increase in revenue of three to four percent, excluding taxes and other items.
Despite this good note, Kevin Foley, the organization’s video gaming analyst, was far from effusive.
‘While not a stellar performance, we think about this broader improvement a tangible indication of sector income stability,’ he told the Associated Press. ‘We’re not saying they’re getting better… At least, it’s some respiration room. It’s better than if it went the other means.’
Its, nevertheless, a rosier outlook than this time this past year, whenever gaming revenues, using the exception of Nevada, remained flat, despite economic improvement and growth in other sectors. In June 2014, Moody’s appraisal was that revenues were weaker than anticipated, and the financial outlook beyond Las Vegas seemed bleak and was graded as ‘negative.’
Now, says Moody’s, operators are benefiting from years of less expensive framework. The economic depression of 2008 hit the casino industry difficult, and forced it to tighten up budgets. Several casino businesses that had started expensive expansion plans at that point were caught quick, as revenue plummeted plus it became extremely difficult to refinance debt.
Running Out of Room
Caesars Entertainment, formerly Harrahs, was the many casualty that is high-profile. After years of expansion, the company was acquired by Apollo Global Management and TPG Capital in a $30.1 billion leveraged takeover.
Caesars acquired an industry-high debt in the procedure, and struggled into the ensuing years, failing to turn a profit until this year, whenever, despite the complex bankruptcy procedures of its main working product, it announced that its margins had returned to ‘pre-crisis’ levels
Foley cautioned that casino operators ‘may be operating out of room to spend less much further,’ adding that ‘too much cost-cutting could sacrifice quality and service, which operators cannot afford at time if they are battling for market share amid supply increases.’
In addition, he warned that casinos must contend with a shortage of growth in customer spending, as disposable income levels remain fairly low.
MGM Vows to Block Connecticut Casino Plan
An artist’s rendering of the MGM Springfield, that has caused a border war to erupt between Connecticut and Massachusetts. (Image: masslive.com)
MGM declared war on Connecticut this week, vowing that it would fight the state’s efforts to build a casino along Interstate 91 on its northern border with Massachusetts.
The proposed property will be positioned near Hartford, CT, and just miles from Springfield, MA, where MGM has just broken ground on an $800 million casino resort project, expected to open in 2018.
Connecticut wants to obtain in there first, with a ‘satellite casino’ that could be erected in much less time than MGM’s ambitious Vegas-style project. Connecticut lawmakers recently passed a bill permitting the adjustments that are constitutional to achieve this.
Bring it On!
‘we are maybe not planning to go peacefully,’ declared William Hornbuckle, President of MGM Resorts International, in an interview aided by the Associated Press this week.
Hornbuckle, who, incidentally, was born and bred in Connecticut, didn’t care to elaborate on exactly just what MGM decided, suffice to express which he and his colleagues were ‘contemplating our choices.’
‘Bring it on, MGM,’ stated Connecticut Representative Stephen D. Dargan, bloodstream pumping. ‘We’re in direct competition!
And another thing: ‘We’re seriously interested in protecting our market share,’ he included. ‘with their tactics, they truly are not. if they think they are going to frighten us’
Thousands of work
Connecticut has sanctioned two casinos on tribal lands in its southeast since the nineties that are early in return for a percentage of this profits.
Just the Mohegan tribe, which operates the Mohegan Sun, as well as the Mashantucket Pequot tribe, which runs Foxwoods, are permitted to use casinos.
Both, however, were struck hard by the global downturn that is economic of and tend to be each over $1 billion in debt.
MGM has made no secret of its need to attract customers from Connecticut, and estimates that some 40 % of footfall will originate from hawaii.
Connecticut lawmakers are concerned about the potential loss of thousands of casino-worker jobs within the state as a result of increased competition from Massachusetts; Foxwoods and Mohegan Sun have laid off hundreds of workers to spend less in recent years.
‘Merely, this might be about siphoning revenues from Connecticut to benefit A las vegas company while at the same time moving tens of thousands of existing jobs from Connecticut to Massachusetts,’ tribal leaders said last week. ‘That’s why the tribes, the legislature, and also the governor have committed to developing an answer that protects Connecticut.’
‘Box of Slots’
Jim Murren, CEO of MGM, and, strangely sufficient, also a Connecticut native, was scathing about the project calling it, witheringly, ‘a field of slots.’
‘I do give a damn about Connecticut because I’m from here,’ he reported year that is early last. ‘we just want their cash to come here!’
While MGM’s threat to Connecticut’s plans is unspecified, it will be possible that the business has some recourse for the legal challenge.
Connecticut attorney general George Jepsen has warned that a third party might claim that exclusive gambling rights towards the tribes, in areas outside their sovereign lands, violates the Equal Protection Clause of the united states Constitution.
It could also be in breach for the Commerce Clause because it would grant rights to conduct gambling ‘for the purpose of protecting in-state economic interests from interstate commerce.’
Deadwood Brings Roulette, Craps, and Keno to Historic Gold Rush Town
Deadwood is betting on its rejuvenated gambling industry that now includes roulette and craps to revamp its tourism numbers that have flatlined throughout the final years. (Image: rapidcityjournal.com)
Deadwood, South Dakota, is less than four miles that are square size, but with 24 gambling venues the town has more casinos than that on most states.
The historic settlement played an important role within the expansion associated with the American west, as miners and gold rushers journeyed into the Dakota Black Hills in search of treasure during the late 1800s.
The storied history of Deadwood is a read that is fascinating but its recent history is not much to write on.
The bustling town of the 19th century is no more, house to less than 1,300 residents in 2015.
Its economy that heavily relies on tourism is struggling to attract site visitors, however that could alter thanks to a new quality put into place July 1st that now permits Deadwood gambling enterprises to provide roulette, craps and keno.
Only poker, blackjack, and slots had been previously allowed.
‘It’s going to replace the image of Deadwood,’ Mike Rodman, executive director associated with the Deadwood Gaming Association stated. ‘Deadwood now is a really full-fledged gaming destination.’
Boom to Bust, Bust to Boom
The once-lawless mining town did not officially legalize gambling until 1989. That provided a spark in tourism that resulted in a boom that is economic.
Tax arises from gambling revenues were allotted towards the preservation of historic buildings, with the Adams Museum & House, the former house of W.E. Adams being restored in 2000.
When HBO launched ‘Deadwood’ in 2004, a tv series that could go on to receive acclaim that is critical run for three years, viewers flocked to the remote Southern Dakota location for a first-hand trip into the past.
Life was good, until it wasn’t.
The Adams Museum & House went all-in on their growing income, setting down generate the Homestake Adams Research and Cultural Center (HARCC), a public housing of Ebony Hills archival materials from its most legendary events and residents.
The museum sought to raise $3.6 million, aided by the populous town guaranteeing $1.5 million paid by the Historic Preservation Fund.
Then in 2006, ‘Deadwood’ was canceled by HBO, and quickly after the swarm of fans soon migrated elsewhere. Couple of years later, the country as being a entire suffered an economic collapse, and Deadwood was hit hard and left nearly, well, dead.
Today the downtown resort hotels, bed and breakfasts, cabins, restaurants, and casinos remain focused on Deadwood that is revitalizing they realize that is just a challenge considering its remoteness.
The closest airport that is commercial an hours drive away in Rapid City, and a local airport at that.
Gambling on Gambling
Unfortuitously for Deadwood, it does not have the fortune of being positioned near large metropolises of men and women or worldwide airports, however it is located just minutes down Interstate 90, the highway that is longest in the usa that extends from Boston to Seattle.
More importantly, it offers history from Civil War Calvary commander George Custer to western legend Wild Bill Hickok, frontierswoman Calamity Jane, and Dr. Valentine McGillycuddy, physician to famed war leader Crazy Horse.
For gamblers, the so-called ‘Dead Man’s Hand’ took place in downtown Deadwood, the aces and eights two-pair hand famously held by Hickok when he was shot from behind in the mind.
It appears only right that Deadwood should offer not only blackjack and poker, but also roulette and craps, as all four were played back the 1800s. The improvements are expected to bring $2 million in additional gaming revenue to the town that is small.