Forty days and nights of Deepwater Horizon put a stop to what looked like an incipient recovery in the Louisiana market. After being down 15% in January, revenue declines shallowed during the following three months (-6%, -5%, -1%). Then came May and a 9% dropoff. Gross revenues — $204 million — are steady with Feb.-April, but whatever seasonal bounce might have been expected with the arrival of May has been blunted.
Inland markets had the worst year/year comparison: -11.5% in Baton Rouge and -10% in both Lake Charles and Shreveport/Bossier City. The reversals in the latter two markets were especially pronounced. The state’s big sluggers, Pinnacle Entertainment‘s L’Auberge du Lac and Harrah’s New Orleans went from positive Aprils to negative Mays.
And, in the Bossier City area, where Horseshoe, Boyd Gaming‘s Sam’s Town and the independent Diamond Jack‘s riverboat were all starting to see daylight in April, everybody was down this month. Baton Rouge riverboats continue to average double-digit declines, so Pinnacle probably needn’t hasten to bring a third vessel to that shallow market, by far the weakest of those with multiple casinos, grossing $16.5 million this month.
I lived in Mobile, Alabama for awhile in the early 90’s (before I headed out west to Las Vegas a couple of years later) and this oil spill is terrible news for the entire Gulf Coast. Along with ruining the livelihood of all the fisherman down there and many other businesses this will also hurt the casinos. Not to mention New Orleans which once again gets a kick in the stomach. This continuous flood of oil could also eventually reach other cities including Tampa and Sarasota on Florida’s west coast. This is a huge disaster for that entire area.
Have the inland/riverboat casinos’ management explained exactly why the oil spill has caused their income to fall? I would expect that the gulfport/biloxi (Miss.) and perhaps New Orleans casinos might be affected due to their proximity to the gulf, but Shreveport is hundreds of miles from the Gulf coast. While there might be loss in fishing income, it seems unlikely this would have happened so quickly, and the $2 billion BP is spending in cleanup should provide some disposable income. What I’m trying to say is, maybe they are using the spill as an excuse for ineffective management.
When you look at the revenue numbers sequentially, Deepwater Horizon is the only variable big enough to account for May #s being flat with April instead of enjoying their usual bump. My best guesstimate — and I’ll admit that a statewide flattening somewhat defies logic — is that tourists who would otherwise have come to Louisiana in May are avoiding it, leaving places like Bossier City reliant upon their regular customers.