Outlook Improves for US Casinos
Las Vegas Casinos
Moody's Investors Service, a credit rating agency, has improved its outlook for casinos in the United States, now upgrading them to “stable”, from “negative”. While the news will be welcomed by casino operators across the US, an analyst at Moody’s has suggested the casino market isn’t “completely healthy”.
The casino industry was rated “negative” by Moody’s, after the recession saw revenue plummet. However, the market’s ratings have been improved after overall gaming revenue remained “flat year over year in March and April 2010”. Keith Foley, Senior Vice President at Moody’s, has noted that while the industry’s performance is far from “stellar”, the results are “a marked improvement over the consistent, and often substantial, declines of 2008 and 2009”.
Moody’s assessment also makes clear that casino operators appear to have invested too much money in their businesses while acting under the presumption that financial growth would continue indefinitely. Foley issued a stark warning to operators currently struggling with debts, noting that “a lot of companies can't afford flat gaming and still turn a profit.”
While Moody’s ratings take into account the entire US casino industry, some gambling venues are still struggling to recover, or even stabilise. In particular, Foley observed that Moody’s isn’t “suggesting an upturn in gaming revenues on the Las Vegas Strip”, although the vice president did note that the credit ratings agency believes “the Strip may have hit bottom”. However, Moody’s has also observed that in other states, such as Iowa and Missouri, casinos are reporting revenue increases.
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