Economy takes its toll on Casinos
20th November, 2008
Top Casino company executives spoke on Wednesday about how they believe the gambling business won’t be the same for years to come, with games makers and casino owners shifting their focus to existing casinos from those being planned.
Gary Loverman , chairman and CEO of Harrah’s Entertainment Inc said, “One of the challenges that has plagued the casino industry for a long time is that we spend money like drunken sailors. I think the industry is going to have to get accustomed to the notion that $1 billion is a lot of money, and not every project is a good project.”
Casino companies that are witnessing their revenues decline across the board because consumers are spending less on gambling and the casino services offered, generally count on the development of new projects for their growth.
In the middle of building the largest private development in U.S history MGM Mirage Inc, has struggled to secure the last of its financing for the CityCentre project on the Las Vegas Strip worth $9.2 billion.
Industry analysts are questioning whether there is the demand for ambitious projects under way like CityCentre, as they can’t borrow money cheaply enough anymore to justify new projects.
MGM Mirage chief financial officer Dan D’Arrigo, said “I don’t see any new development coming to this market for the next five to seven years.”
These halts and delays in developments have knock on effects on games machines manufacturers like International Game Technology, who now have to switch to convincing existing casinos they need replacements from selling to new casinos.
“Until those imbalances are resolved ...Its going to get very hard to get excited about the next new buffet, the next new food and beverage experience, the next new nightclub experience, the next new gaming experience.” said Loverman .
By Rommon
