Maybe all this fussin’ and frettin’ (some of it from yours truly) about casino smoking bans is masking the real issue: Casino expansion in the U.S. has finally hit the wall in the form of one big-ass recession. Five states are contemplating adding casinos this November and in all but one (Maine), it’s expected to pass. If so, it’ll take some brave souls to buck the headwinds that are pushing casino revenues down.
Gambling halls in Colorado just had another crummy month, with Central City down 26%, Black Hawk off 20% and Cripple Creek declining a “mere” 10%. Some of that is undoubtedly smoking-ban-related falloff, but the smoking issue is beclouding one’s ability to see just how much of the decline is a recessionary side effect.
It’s no easier to get a clear picture in Mississippi. There, you can still smoke ’em if you’ve got ’em, but casino revenues are also on the downward slope. The view here is fogged by Hurricane Gustav, which levied a double-digit whammy on the Biloxi-Gulfport market. But Biloxi Mayor A.J. Holloway — who’s been through good times and bad — isn’t going for the easy explanation. He tells the Clarion Ledger, “the real story here is the economy. It’s catching up on us. This is something I kind of anticipated. Las Vegas and Atlantic City have been seeing this for months, so it was just a matter of time before it reached us.” As a consequence, state and local officials are starting to talk in terms of diminished expectations.
As for Louisiana (-23%), it got thwacked twice over, thanks to both Gustav and his bro, Hurricane Ike. Ergo, the entire month’s numbers have to be tossed out as an aberration, even the relatively modest 9% decline in Shreveport-Bossier City. (“Relatively modest” only if your yardstick is the -34% declivity suffered by Lake Charles‘ riverboats.)
Too bad for Pinnacle Entertainment, though: Its L’Auberge du Lac was starting to give Harrah’s New Orleans tough competition for the #1 revenue-earning spot in the Pelican State — only $1 million behind Harrah’s in July.
Two of the four lowest-earning properties in the state were Tropicana Entertainment riverboats. CEO Scott Butera‘s got his work cut out for him. At least Butera’s finally driven a stake through the heart of that 10,000-room grotesquerie that predecessor William J. Yung III proposed to build on the site of the Las Vegas Tropicana. Trop Ent needs to maximize what it’s got, not chase after pipe dreams.
