Moody’s Investors Services has some good news for the gaming market that is american. Sort of.
Us 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 appraisal 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 companies poach business from one another, as contributing factors.
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 1 . 5 years, which could result within an increase in revenue of three or four percent, excluding taxes and other items.
The company’s gaming analyst, was far from effusive despite this positive note, Kevin Foley.
‘While not a stellar performance, we consider this broader improvement a tangible indication of sector revenue stability,’ he told the Associated Press. ‘We’re not saying they’re getting better… At least, it’s some breathing room. It’s better than if it went the other way.’
It really is, nevertheless, a rosier outlook than this time around year that is last when gaming revenues, with the exception of Nevada, stayed flat, despite economic improvement and development in other sectors. In June 2014, Moody’s appraisal was that revenues were weaker than expected, and the economic outlook beyond Las Vegas seemed bleak and was graded as ‘negative.’
Now, says Moody’s, operators are benefiting from years of lower cost framework. The downturn that is economic of hit the casino industry difficult, and forced it to tighten budgets. Several casino businesses which had begun expansion that is expensive at that point were caught quick, as revenue plummeted also it became nearly impossible to refinance debt.
Running Out of Room
Caesars Entertainment, formerly Harrahs, was the many high-profile casualty. The company was acquired by Apollo Global Management and TPG Capital in a $30.1 billion leveraged takeover after years of expansion.
Caesars acquired an industry-high debt in the process, and struggled into the ensuing years, failing to turn a profit until this year, whenever, despite the complex bankruptcy proceedings of its main running product, it announced that its margins had returned to ‘pre-crisis’ levels
Foley cautioned that casino operators ‘may be operating out of space to cut costs much further,’ adding that ‘too much cost-cutting could sacrifice quality and service, which operators cannot afford at time when they are battling for market share amid supply increases.’
In addition, he warned that casinos must contend by having a shortage of development in customer spending, as disposable income amounts 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 their state’s efforts to build a casino along Interstate 91 on its border that is northern with.
The proposed home would be positioned near Hartford, CT, and simply miles from Springfield, MA, where MGM has just broken ground on an $800 indian dreaming slot gratis 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 task. Connecticut lawmakers recently passed a bill permitting the constitutional adjustments needed to achieve this.
Bring it On!
‘We’re perhaps not likely to go peacefully,’ declared William Hornbuckle, President of MGM Resorts International, in an interview with the Associated Press this week.
Hornbuckle, who, incidentally, was born and bred in Connecticut, don’t care to elaborate on precisely what MGM decided, suffice to state he and his peers had been ‘contemplating our choices.’
‘Bring it on, MGM,’ said 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 included. ‘with their tactics, they are not. if they think they are going to frighten us’
Thousands of Jobs
Connecticut has sanctioned two casinos on tribal lands in its southeast since the nineties that are early in return for a percentage associated with earnings.
Only the Mohegan tribe, which runs the Mohegan Sun, as well as the Mashantucket Pequot tribe, which runs Foxwoods, are permitted to use casinos.
Both, however, had been hit hard by the global economic depression of 2008 and are each over $1 billion in financial obligation.
MGM has made no secret of its desire to attract customers from Connecticut, and estimates that some 40 percent of footfall will result from hawaii.
Connecticut lawmakers are involved about the potential loss of thousands of casino-worker jobs into the state as being a results of increased competition from Massachusetts; Foxwoods and Mohegan Sun have let go hundreds of workers to save money in recent years.
‘Just, this is certainly about siphoning revenues from Connecticut to gain A las vegas company while at the same time moving thousands of existing jobs from Connecticut to Massachusetts,’ tribal leaders said last week. ‘That’s why the tribes, the legislature, as well as the governor have committed to developing a solution that protects Connecticut.’
‘Box of Slots’
Jim Murren, CEO of MGM, and, strangely enough, also a Connecticut native, has been scathing about the project calling it, witheringly, ‘a box of slots.’
‘we do give a damn about Connecticut because I’m from here,’ he stated year that is early last. ‘I just want their funds to come here!’
While MGM’s threat to Connecticut’s plans is unspecified, it is possible that the company has some recourse for a challenge that is legal.
Connecticut attorney general George Jepsen has warned that a third party might claim that exclusive gambling rights to your tribes, in areas outside their sovereign lands, violates the Equal Protection Clause of the united states Constitution.
It might additionally be in breach of 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 that are several. (Image: rapidcityjournal.com)
Deadwood, South Dakota, is less than four miles that are square size, however with 24 gambling venues the town has more casinos than that on most states.
The settlement that is historic an important role into the expansion associated with the American west, as miners and silver 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 present history is not much to come up with.
The bustling town of the century that is 19th no more, house to less than 1,300 residents in 2015.
Its economy that heavily depends on tourism is struggling to attract visitors, however that may alter thanks to a resolution that is new into place July 1st that now permits Deadwood casinos to offer roulette, craps and keno.
Only poker, blackjack, and slots had been formerly allowed.
‘It’s going to replace the image of Deadwood,’ Mike Rodman, executive director for the Deadwood Gaming Association stated. ‘Deadwood now could be a truly full-fledged gaming location.’
Boom to Bust, Bust to Boom
The once-lawless mining town don’t formally legalize gambling until 1989. That provided a spark in tourism that led to a financial boom.
Tax proceeds 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 will carry on to receive acclaim that is critical run for three years, people 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 create the Homestake Adams analysis and Cultural Center (HARCC), a public housing of Black Hills archival materials from the most legendary events and citizens.
The museum sought to raise $3.6 million, because of the 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. Two years later, the nation as being a whole suffered an economic collapse, and Deadwood ended up being hit hard and left almost, well, dead.
Today the downtown resort hotels, bed and breakfasts, cabins, restaurants, and gambling enterprises 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 regional airport at that.
Gambling on Gambling
Unfortunately for Deadwood, it generally does not have the fortune of being located near large metropolises of people or worldwide airports, but it is located just minutes down Interstate 90, the highway that is longest in the usa 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.
The aces and eights two-pair hand famously held by Hickok when he was shot from behind in the head for gamblers, the so-called ‘Dead Man’s Hand’ took place in downtown Deadwood.
It appears only right that Deadwood should offer not merely poker and blackjack, but also roulette and craps, as all four were played back the 1800s. The additions are expected to bring $2 million in additional gaming revenue to the town that is small.