Casinos Won't Recover in 2010:Report
By Jeanine Poggi
TheStreet.com Staff Reporter
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.
And while MGM Mirage's (MGM:NYSE) 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:NYSE) and Wynn Resorts (WYNN:NYSE) , 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:NYSE) , 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.
http://www.thestreet.com/offers/omnisky/html/markets/marketfeatures/10659249.html
KeyBanc Capital Markets give MGM Mirage an “underweight” rating for the gaming company on the basis of continued pressure on Las Vegas room rates and sluggish business in Atlantic City and the Midwest during the fourth quarter of 2009, heavily impacted by the opening of their own $8.5 billion City Center Project in the heart of Las Vegas.
Other MGM Mirage Posts
MGM MIRAGE (NYSE: MGM) - Living on a Prayer in 2010 (Despite "Upgrade")
http://tobuds.com/blogs/blog2.php/2010/01/13/mgm-mirage-nyse-mgm-living-on-a-prayer-i
Casinos Won't Recover - What it Means for MGM Mirage
http://tobuds.com/blogs/blog2.php/2010/01/11/casinos-won-t-recover-what-it-means-for
MGM Mirage on Life Support - 2010 Not a Happy New Year
http://tobuds.com/blogs/blog2.php/2010/01/07/mgm-mirage-on-life-support-2010-not-a-ha
MGM Mirage - City Center is Doomed in 2010 to Cannibalism
http://tobuds.com/blogs/blog2.php/2009/12/31/mgm-mirage-city-center-is-doomed-to-cann
James "Jimmy" Murren - CEO MGM Mirage, Has A Magic Dream
http://tobuds.com/blogs/blog2.php/2009/12/29/james-jimmy-murren-ceo-mgm-mirage-has-a
MGM's Kirk Kerkorian's CEO (Jim Murren) - A Con Artist?
http://tobuds.com/blogs/blog2.php/2009/12/21/james-j-murren-chairman-of-the-board-and
MGM's Mister Kerkorian is a Very Wise Man
http://tobuds.com/blogs/blog2.php/2009/12/21/mgm-s-mister-kerkorian-is-a-very-wise-ma
Also see > CityCenter, Infinity World Development, MGM Mirage, Tracinda, Kerkorian