Moody’s Investors Services has some good news for the US 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 US land-based casino industry is showing signs of improvement, but only a little, 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 being tracked by Moody’s, except for Connecticut and New Jersey, the company said, with an normal development, year-on-year, of 4.1 % across those states.
Moody’s cited a positive trend of revenue growth, cost-cutting, and reduced market ‘cannibalization,’ whereby organizations poach business from the other person, 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, that could result within an increase in revenue of 3 to 4 percent, excluding taxes and other items.
Despite this positive note, Kevin Foley, the organization’s video 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 means.’
It’s, nevertheless, a rosier outlook than this time around year that is last whenever gaming revenues, because of the exception of Nevada, stayed flat, despite economic improvement and growth in other sectors. In June 2014, Moody’s appraisal was that revenues were weaker than expected, and the financial 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 downturn that is economic of hit the casino industry difficult, and forced it to tighten budgets. Several casino businesses which had started expansion that is expensive at that point were caught brief, as revenue plummeted also it became nearly impossible 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 https://playpokiesfree.com/indian-dreaming-slot/ a $30.1 billion leveraged takeover.
Caesars acquired a debt that is industry-high the method, and struggled into the ensuing years, failing to turn a profit until this year, whenever, inspite of the complex bankruptcy procedures of its main running unit, it announced that its margins had returned to ‘pre-crisis’ levels
Foley cautioned that casino operators ‘may be running out of room to lower your expenses 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 having a shortage of growth in customer spending, as disposable income levels remain relatively low.
MGM Vows to Block Connecticut Casino Plan
An artist’s rendering of the MGM Springfield, which has triggered 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 create a casino along Interstate 91 on its border that is northern with.
The proposed home could 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 have in there first, with a ‘satellite casino’ that may be erected in much less time than MGM’s ambitious Vegas-style project. Connecticut lawmakers recently passed a bill permitting the constitutional adjustments needed to achieve this.
Bring it On!
‘We’re not gonna go peacefully,’ declared William Hornbuckle, President of MGM Resorts Global, in an interview because of the Associated Press this week.
Hornbuckle, who, incidentally, was bred and born in Connecticut, don’t care to elaborate on precisely what MGM had planned, suffice to state he and his colleagues had been ‘contemplating our choices.’
‘Bring it in, MGM,’ said Connecticut Representative Stephen D. Dargan, bloodstream pumping. ‘We’re in direct competition!
And another plain thing: ‘We’re serious about protecting our share of the market,’ he added. ‘If they think they’re going 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 early nineties, in return for a portion regarding the profits.
Only 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 in the economy of 2008 and they are 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 come from their state.
Connecticut lawmakers are involved about the prospective lack of thousands of casino-worker jobs in the state being a consequence of increased competition from Massachusetts; Foxwoods and Mohegan Sun have laid off hundreds of employees to save money in recent years.
‘Merely, this might be about siphoning profits from Connecticut to gain a vegas company while at the same time frame moving a large number of existing jobs from Connecticut to Massachusetts,’ tribal leaders stated last week. ‘That’s why the tribes, the legislature, plus the governor have committed to developing an answer that protects Connecticut.’
‘Box of Slots’
Jim Murren, CEO of MGM, and, strangely enough, additionally a Connecticut native, has been scathing about the project calling it, witheringly, ‘a box of slots.’
‘I do give a damn about Connecticut because I’m from there,’ he reported early this past year. ‘we just want their cash 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 towards the tribes, in areas outside their sovereign lands, violates the Equal Protection Clause of the US Constitution.
It could additionally be in breach associated with the Commerce Clause because it would grant rights to conduct gambling ‘for the purpose of protecting in-state interests that are economic 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 over the final years that are several. (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 of all states.
The historic settlement played an important role in the expansion regarding 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 fascinating study, but its recent history isn’t much to write on.
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 site visitors, however that may alter thanks to a new quality put into place July 1st that now permits Deadwood casinos to offer roulette, craps and keno.
Only poker, blackjack, and slots were previously 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 really full-fledged gaming location.’
Boom to Bust, Bust to Boom
The mining that is once-lawless didn’t formally legalize gambling until 1989. That provided a spark in tourism that resulted in a financial boom.
Tax proceeds from gambling revenues were allotted towards the conservation 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 would go on to receive acclaim that is critical run for three years, people flocked to the remote South 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 the growing income, setting down to generate the Homestake Adams Research and Cultural Center (HARCC), a public housing of Ebony Hills archival materials from the most legendary events and residents.
The museum sought to raise $3.6 million, utilizing 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 world being a whole suffered an economic collapse, and Deadwood had been hit hard and left nearly, well, dead.
Today the downtown hotels, bed and breakfasts, cabins, restaurants, and gambling enterprises remain dedicated to revitalizing Deadwood, but 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
Unfortuitously for Deadwood, it doesn’t have the fortune to be positioned near big metropolises of people or international airports, but 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.
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 just poker and blackjack, but also roulette and craps, as all four were played back in the 1800s. The additions are expected to bring $2 million in additional video gaming revenue to the town that is small.