Casinos Won't Recover in 2010: Report
By Jeanine Poggi 01/11/10 - 03:45 PM EST
NEW YORK (TheStreet) -- The casino sector is unlikely to recover in 2010, according to a new report by Standard & Poor's.
MGM Mirage's(MGM Quote) CityCenter could fuel modest growth in Las Vegas visitation, according to the note by credit analyst Ben Bubeck, it's unclear whether this will translate into a meaningful boost in gaming revenue.
S&P said it expects gaming revenue will be flat to slightly down in 2010, following a 10.6% drop in 2008 and a 12.3% decline for the 10 months ended Oct. 31, 2009.
MGM, which relies heavily on the Las Vegas Strip, has the biggest credit risk, according to S&P. The report said Las Vegas Sands(LVS Quote) and Wynn Resorts(WYNN Quote), which have a more diversified portfolio and significant opportunities in the booming Macau enclave, are less of a risk.
S&P believes the Macau market will grow between 10% and 15% in 2010.
Currently, Pennsylvania is the most relevant market to focus on, according tot he report, especially after it approved table games last week. Penn National Gaming(PENN Quote), for one, operates a casino in the area.
S&P also noted that the expansion in gambling in Pennsylvania has put pressure on nearby Atlantic City. Slot revenue in Atlantic City has declined 10% every year since slot machines came to Pennsylvania in 2006.
Reported by Jeanine Poggi in New York.
EDITORIAL FOOTNOTE ---WILL THE MTGA RISE TO THE OCCASION? BETTER YET, CAN THEY? IF THE PAST IS AN INDICATOR, THEN IT WON'T HAPPEN? ARE WE GOING TO GET MORE EXCUSES? WHAT DO YOU THINK?