U.S Casinos Feel Recession Heat
It’s a given fact that the majority of casinos in the U.S have been impacted by the recession and the recent oil spillage in the Gulf of Mexico.
As any decent economist will tell you we live in uncertain times and it seems that your average American player has taken this advice to heart and decided to wager less at land-based and internet casinos for the time being.
“Gamblers won’t wager unless they have money,” said Joseph Weinert, who is the senior vice president of Linwood, a Spectrum Gaming Group whose Head Quarters is in New Jersey. In the past there has been the mistaken belief that the U.S casino industry is recession “resistant”. This is completely false, given the fact that when there was a complete slump in the U.S economy a couple of years ago, the casino industry tanked big time.”
Casino revenue for licensed casinos in Missippi totalled $1.83 billion for the first three quarters of 2010; this figure has dropped by 12.9% since 2008 from the first nine months. The Missippi Department of revenue has indicated that overall casino revenues slumped by a margin of only 3.3% since the first three quarters of 2009.
According to the latest financials 11 casinos from all over the Mississippi Gulf Coast dropped by 12.7% from the first nine months of 2008, but indicated a 1.3% decline from 2009, in essence showing that the oil spill only had a minor impact on gambling. Overall Mississippi has 19 land-based casinos along its river banks such as Tunica in the Arkansas-Tennessee corner and its overall revenues slumped from 12.8% from 2008 and 5% since 2009.
There are 13 riverboat casinos In Louisiana, Harrah’s New Orleans casino and the four race track casinos, 2010 the first three quarters indicated a 7.7% decline in gambling profits since the first 9 months of 2008. Figures for 2010 have indicated a mere 5.3% drop since last year
Chairman of the Louisiana Gaming Control Board, Dain Morgan said, “The figures with regard to gambling revenues are slowly but surely on the up again. Constant and positive growth remains a concern both State wise and across the U.S.”
Frank Fahrenkoph, President of the American Gaming Association said that wagering profits are up by 1.3% in state-licensed casinos, from the second quarter to the third quarter tipping the scales at $8 billion for 2010. However, for the same period in 2009 casinos took in a $100 million more for the same period in 2010. The main reason for this is that your average gambler has gambled less, said Fahrenkoph.
In the New Orleans region there are two riverboat casinos as well as a track casino and land-based casino, on the whole wagering profits have dropped by 9.4% for the first three-quarter comparison of 2008 to 2010 and slumped by 2.9% since last year. The vessels and the track casino by and large caters more for the home market, in contrast to Harrah’s which aims at attracting visitors, specifically during the months of the following major events: Mardi Gras, the New Orleans Jazz & Heritage Festival, the Essence Festival and big-ticket sporting events.
Pinnacle endeavours to launch its $357 million riverboat casino-hotel venture in Baton Rouge in December 2011. This market, presently holds two gambling boats, in 2008’s first three quarters its profits slumped by 13.3% drop to the first three of 2010.
“We firmly believe that a new casino might reap the benefits in that region, however, it will be at the cost of other land-based casinos,” said industry analyst Cory Morowitz of Galloway, N.J.-based Morowitz Gaming Advisors. “The market over there is rather saturated.”
“To be honest there is still a fair amount of investors within the gambling industry, but with the current recession still looming dangerously on our front porch cash is still a major factor to finance these projects,” Gregory said. “[addtoany]
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