The near-term financial outlook for the casino industry is dim, though not as bad as it is for the leisure industry as a whole, according to one analyst.
“In the aftermath of Tuesday’s tragedies, it is becoming increasingly clear that travel and tourism will be one of the hardest hit sectors of our economy and one of the areas where consumer confidence will take the longest to return,” Jason Ader of Bear, Stearns & Co. said in a research report.
He added, “We believe gaming is more insulated than most other leisure and travel industries at this point. We believe that regional markets including Atlantic City and the riverboats will fare somewhat better than Las Vegas, given that they are substantially less reliant on air travel for their customer bases.”
The only relevant historical gauge for the casino industry’s performance is the 1991 Gulf War, Ader said. In Atlantic City, the 1991 comparisons are skewed by the opening of the Trump Taj Mahal less than a year earlier.
In January 1991, when the Gulf War began, Atlantic City casino revenue declined 8.3 percent compared to the year-earlier period.
“Comparisons should have been relatively easy for the market. On a same-store basis excluding the Taj Mahal, we estimate Atlantic City revenues declined 20.2 percent,” Ader said.
Del. racetracks net
$43.2M. from slots
The Delaware racetracks had a robust August, reporting an 11.4 percent increase in slot revenue for the four-week reporting period.
The Delaware State Lottery, which controls the tracks’ slots, reported that the three tracks generated $43.2 million in slot revenue, up 11.4 percent compared to the same period a year earlier.
The breakdown by track: Delaware Park $21.2 million, up 11.3 percent; Dover Downs $14.2 million, up 14.9 percent; and Harrington Raceway $7.8 million, up 6.1 percent.
Did you know?
Of the 48,416 Atlantic City casino employees as of Sept. 1, 39,016 work full time, according to the Casino Control Commission. Others are part-time, casual or on a leave of absence.
Quote of the week
“It’s going to take a long time before people say, ‘Let’s go out and have a good time.'”
_- Alfred Luciani, president of Sands Casino Hotel, anticipating worse business for the casino industry after the terrorist attacks in New York and Washington
Park Place Postpones New Hotel Tower
LAS VEGAS (Reuters) – Park Place Judi Slot Entertainment Corp. (NYSE:PPE – news), citing the slowing economy and travel industry disruption due to last week’s attacks, on Monday said it will postpone construction of a new Las Vegas hotel tower and may cut its headcount through attrition.
“We feel that it’s important, especially during this period of recovery, to maintain a high level of flexibility,” Park Place Chief Financial Officer Scott LaPorta said in a statement. “For this reason, we’re not initiating any new capital projects at this time, and we’re looking at a number of ways to reduce our operating costs, including the reduction of our overall headcount through attrition.”
Park Place, the world’s largest gaming company, said it still plans to continue with construction of The Colosseum, a $75 million, 4,000-seat entertainment venue at Caesars Palace in Las Vegas. The Colosseum is scheduled to open in March 2003, Park Place said.
The new 29-story, $475 million hotel tower at Caesars Palace was expected to have 900 suites and mini-suites, restaurants and retail space. The originally scheduled completion date was early 2004. While no final revised schedule has been set, Park Place said it expects the new tower project would not start until after completion of The Colosseum.