Casino shares plummet as industry feels pinch
17th April, 2008
Share prices in a number of major casino operators fell sharply this week after a slew of negative economic reports about the industry.
With the global credit crunch taking a toll on disposable consumer incomes all over the world, non-essential spending on such things as casino gambling has taken a major hit.
"Trends in Las Vegas and across the US have been softer this year as both gaming and non-gaming revenues have been impacted by a difficult economic environment," Deutsche Bank gaming analyst Bill Lerner said in a note to investors.
His comments followed an announcement that leading casino operator MGM Mirage is to lay-off 440 managers and supervisors in what the company has said is a necessary cost-cutting exercise.
Reflecting these difficulties, shares for MGM Mirage fell 4.32 per cent on Tuesday, while shares of another major casino operator - Las Vegas Sands - were also down by 6.71 per cent.
Gaming revenues across Nevada have also fallen in three of the past four months and room rates in Sin City are now 19 per cent lower than they were a year ago.
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