Wall Street: Viva Las Vegas

cards-casino“Results could be lackluster, even if more states allow casinos, as is the case in Ohio, which we estimate cannibalized roughly one-third of its revenues from surrounding states.”  So wrote Fitch Ratings Service analyst Michael Paladino, assessing the gaming industry’s national prospects. They’re not good — but there’s a silver lining. Demand in Las Vegas continues to grow — heck, the North Strip is coming back to life — even as regional markets tank. They’re forecast to decline as much as 5% over the next year and a half.

These numbers are putting some truth into the cliche that regional, ‘convenience’ casinos can never compete with Las Vegas because the latter offers something unique, not to mention a density of attractions with which no other casino-enabled city can rival. So, when money’s tight, players seem to be saving up for Sin City. One of the causes of regional softness catches the eye: “stagnant wages among lower- tier players.” Yes, the nickel-and-diming of lower- and middle-class workers is hurting the casino. Are there enough whales to make up for that?

CromwellIt’s like some weird, inverted form of biology in which the roots shrivel (Harrah’s Tunica) while the fruit (The Cromwell) continues to thrive. “Compared to the U.S. regional and local gaming markets, the Las Vegas Strip has a much broader, deeper and diversified pool of visitors. It attracts people on a nationwide and global basis, along with a very large revenue and earnings component related to the midweek convention business,” wrote Keith Foley of Moody’s Investor Service.

If that’s not enough to inspire a chorus of “Viva Las Vegas,” how about the big Elvis Presley exhibit at the Westgate Las Vegas, which is losing no time making a mark. Items on view will include The King’s 1976 Lincoln Mark IV, his earliest extant concert poster (from 1954), a ruby-and-diamond ring and a Walther PPK. If there’s going to be a  handgun in an Elvis museum, it damn well better have been used to shoot out a TV (and, if they could talk, the walls of the Westgate could tell us quite a few tales about Elvis and firearms).

Some states are finding different ways of shaking money out of the piggybank. In New York State, it takes the form of extending racino AC slotshours until the dawn hours. Somewhat nonsensically, tracks will be able to keep their slots spinning until 6 a.m., instead of opening two hours earlier at 8 p.m. Empire State law mandates, perhaps arbitrarily, that racinos shut down for four hours a day. Gov. Andrew Cuomo (D) and the Lege have been very generous to the gaming industry in New York, and this bonbon is sure to be well received, even if at least one track — Saratoga Casino & Racetrack — plan to abstain for now.

This entry was posted in Economy, Harrah's, history, Mississippi, New York, Ohio, Racinos, The Strip, Wall Street, Westgate LV. Bookmark the permalink.