As we've discussed bingos aren't the only gaming environments suffering under the current economic reality. Las Vegas continues to struggle as visitors dwindle and the ones who still make the trip tighten their belts. Below is an another article detailing the Strip's continued problems.
"Wall Street is suggesting the unthinkable. Strip casino operators might actually close under-performing resorts because it makes sense in the current economic environment.
JPMorgan gaming analyst Joe Greff posed the concept to Wynn Resorts Ltd. Chief Executive Officer Steve Wynn during a conference call when the company was explaining cost cuts of $75 million to $100 million. Greff wondered whether the competition might reduce capacity.
Wynn pondered the notion, but wouldn't speculate.
Macquarie Research gaming analyst Joel Simkins thoroughly addressed the idea in a Feb. 20 investors report. He said the casino industry could downsize operations in the way other consumer-service businesses have.
"The sector stands on the precipice of a shake-out and capacity rationalization," Simkins said. "It is reasonable to assume that 5 to 10 percent of the excess supply in the industry could be shuttered in one to three years."
For the complete story, please see Howard Stutz, INSIDE GAMING: Casinos may have to profit or perish, ReviewJournal.com, March 1, 2009.
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