Vegas Strip to Face Challenging 2009/ Some Regional Casinos May Hold Their Own

Casino operators are likely to continue to face difficult times on the Las Vegas Strip in 2009, but regional markets could offer a ray of hope, a JPMorgan analyst said Wednesday.

The gambling sector has struggled as consumers have curbed discretionary spending due to eroding credit, the ongoing housing downturn, escalating food costs and unemployment concerns.

Furthermore, airlines have made capacity cuts to cope with the worsening economy and higher fuel costs. If fewer flights are heading to Las Vegas, it is likely that the casinos and hotels are hosting fewer visitors there even as they have continued to expand, noted JPMorgan analyst Joseph Greff.

"The idea that gaming is a recession-resistant industry is not true...not anymore at least. This is likely due to the fact that gaming is a more mature and widespread form of entertainment than in prior U.S. downturns and, in the case of the Las Vegas Strip, a more expensive consumer discretionary good," Greff wrote in a note to clients.

For the complete story, please see Sector Snap: Vegas Strip casinos face hard 2009
, Associated Press via CEP News, January 7, 2009.