Moody’s Investors Services has the right news for the US gaming market. Sort of.
American casino revenues are up slightly, but Moody’s warns that operators have no more room to cut costs.
The US land-based casino industry is showing indications of improvement, but only a bit, according to Moody’s, which this week upgraded its assessment of the market from negative to stable.
In May, gambling revenue rose in all of the 18 states that are tracked by Moody’s, except for Connecticut and New Jersey, the company stated, with an average development, year-on-year, of 4.1 % across those states.
Moody’s cited a trend that is positive of growth, cost-cutting, and reduced market ‘cannibalization,’ whereby companies poach business from each other, as contributing facets.
The firm believes there is room for modest growth, and that revenue will increase between zero and 2 percent each month, year-over-year, for the following 12 to 18 months, which may result in an increase in profit of 3 to 4 percent, excluding taxes and other items.
Despite this good note, Kevin Foley, the organization’s gaming analyst, was far from effusive.
‘While not just a performance that is stellar we think about this broader improvement a tangible sign of sector revenue stability,’ he told the Associated Press. ‘We’re not saying they’re getting better… At least, it’s some respiration space. It’s better than if it went the other method.’
It’s, nevertheless, a rosier outlook than this time around year that is last when gaming revenues, with all the exception of Nevada, stayed flat, despite economic improvement and development in other sectors. In June 2014, Moody’s appraisal was that revenues had been weaker than anticipated, and the economic outlook beyond Las Vegas seemed bleak and was graded as ‘negative.’
Now, says Moody’s, operators are profiting from years of lower cost structure. The economic depression of 2008 hit the casino industry difficult, and forced it to tighten budgets. Several casino businesses which had begun expansion that is expensive at the period were caught quick, as revenue plummeted also it became extremely difficult to refinance debt.
Running Out of Room
Caesars Entertainment, previously Harrahs, was the most casualty that is high-profile. The company was acquired by Apollo Global Management and TPG Capital in a $30.1 billion leveraged takeover after years of expansion.
Caesars acquired a debt that is industry-high the procedure, and struggled into the ensuing years, failing to turn a profit until this year, when, inspite of 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 space to conserve money much further,’ adding that ‘too much cost-cutting could sacrifice quality and service, which operators cannot afford at a right time once they are battling for market share amid supply increases.’
In addition, he warned that casinos must contend with a shortage of development in consumer spending, as disposable income levels remain reasonably low.
MGM Vows to Block Connecticut Casino Plan
An musician’s rendering of the MGM Springfield, which 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 create a casino along Interstate 91 on its northern border with Massachusetts.
The proposed home will be positioned near Hartford, CT, and simply miles from Springfield, MA, where MGM has just broken ground on an $800 million casino resort project, expected to start in 2018.
Connecticut wants to have in there first, with a ‘satellite casino’ that could be erected in much less time than MGM’s committed Vegas-style project. Connecticut lawmakers recently passed a bill permitting the constitutional adjustments needed to achieve this.
Bring it On!
‘we are perhaps not planning to go peacefully,’ declared William Hornbuckle, President of MGM Resorts Global, in an interview aided by the Associated Press this week.
Hornbuckle, who, incidentally, was bred and born in Connecticut, didn’t care to elaborate on exactly just what MGM had planned, suffice to state that he and his colleagues were ‘contemplating our choices.’
‘Bring it on, MGM,’ stated Connecticut Representative Stephen D. Dargan, blood pumping. ‘We’re in direct competition!
And another thing: ‘We’re intent on protecting our share of the market,’ he added. ‘If they think they’re planning to scare us with their tactics, they’re not.’
Thousands of Jobs
Connecticut has sanctioned two casinos on tribal lands in its southeast since the nineties that are early in return for a portion for the profits.
Just the Mohegan tribe, which runs the Mohegan Sun, and the Mashantucket Pequot tribe, which runs Foxwoods, are permitted to operate casinos.
Both, however, had been struck hard by the global downturn in the economy of 2008 and are each over $1 billion in financial obligation.
MGM has made no secret of its need to attract customers from Connecticut, and estimates that some 40 % of footfall will result from hawaii.
Connecticut lawmakers are worried about the possible loss in thousands of casino-worker jobs into the state as a results of increased competition from Massachusetts; Foxwoods and Mohegan Sun have let go hundreds of employees to cut costs in recent years.
‘Simply, that is about siphoning revenues from Connecticut to gain A las vegas, nevada company while at the same time frame moving a large number of existing jobs from Connecticut to Massachusetts,’ tribal leaders stated week that is last. ‘That’s why the tribes, the legislature, plus the governor have committed to developing a solution that protects Connecticut.’
‘Box of Slots’
Jim Murren, CEO of MGM, and, strangely sufficient, additionally a Connecticut native, was scathing about the project calling it, witheringly, ‘a box of slots.’
‘we do give a damn about Connecticut because i am from here,’ he reported early a year ago. ‘I just want their cash to come here!’
While MGM’s threat to Connecticut’s plans is unspecified, it’s possible that the business has some recourse for the challenge that is legal.
Connecticut attorney general George Jepsen has warned that the third party might claim that exclusive gambling rights to your tribes, in areas outside their sovereign lands, violates the Equal Protection Clause of the US indian dreaming slot wins 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 within the last years that are several. (Image: rapidcityjournal.com)
Deadwood, Southern Dakota, is less than four square miles in size, however with 24 gambling venues town has more casinos than that on most states.
The settlement that is historic an important role in the expansion associated with the American west, as miners and gold rushers journeyed into the Dakota Black Hills in search of treasure through 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 this 19th century is no more, home to less than 1,300 residents in 2015.
Its economy that heavily depends on tourism is struggling to attract site visitors, however that may change thanks to a resolution that is new into place July 1st that now permits Deadwood gambling enterprises to offer roulette, craps and keno.
Only poker, blackjack, and slots had been formerly allowed.
‘It’s going to change the image of Deadwood,’ Mike Rodman, executive director for the Deadwood Gaming Association said. ‘Deadwood now could be a truly full-fledged gaming destination.’
Boom to Bust, Bust to Boom
The mining that is once-lawless don’t formally 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 previous house of W.E. Adams being restored in 2000.
When HBO launched ‘Deadwood’ in 2004, a tv series that will go on to receive critical acclaim and 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 income that is growing down to produce the Homestake Adams analysis and Cultural Center (HARCC), a public housing of Black 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 soon after the swarm of fans soon migrated elsewhere. 2 yrs later, the country as being a entire suffered an economic collapse, and Deadwood was hit hard and left nearly, well, dead.
Today the downtown hotels, bed and breakfasts, cabins, restaurants, and gambling enterprises remain devoted to Deadwood that is revitalizing they understand that is just a challenge considering its remoteness.
The closest commercial airport is an hours drive away in Rapid City, and a local airport at that.
Gambling on Gambling
Unfortuitously for Deadwood, it doesn’t have the fortune to be situated near big metropolises of people or international airports, but it is located just minutes off Interstate 90, the highway that is longest in America that stretches from Boston to Seattle.
More to the point, this has history from Civil War Calvary commander George Custer to western legend crazy Bill Hickok, frontierswoman Calamity Jane, and Dr. Valentine McGillycuddy, physician to famed war leader Crazy Horse.
For gamblers, the alleged ‘Dead Man’s Hand’ took place in downtown Deadwood, the aces and eights two-pair hand famously held by Hickok as he had been shot from behind in the mind.
It appears only right that Deadwood should provide 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 small town.