{"id":14563,"date":"2014-09-15T13:30:56","date_gmt":"2014-09-15T21:30:56","guid":{"rendered":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/?p=14563"},"modified":"2020-06-24T05:26:43","modified_gmt":"2020-06-24T13:26:43","slug":"cycle-of-futility-hard-luck-in-indian-country","status":"publish","type":"post","link":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/cycle-of-futility-hard-luck-in-indian-country\/","title":{"rendered":"Cycle of futility; Hard luck in Indian Country"},"content":{"rendered":"

As the casino industry braces itself for Global Gaming Expo<\/strong>, this could hardly be a worse moment<\/a> to be hawking slot machines. Not only is it undergoing a \"slots\"<\/a>painful contraction but new markets (like Boston<\/strong> and Washington, D.C.<\/strong>) are a long way off from opening. As the U.S. casino industry does the unthinkable — remember the days when it was “recession proof”? — and downsizes, that makes for a lot of orphaned slots … 9,675 according to analyst Todd Eilers<\/strong>.\u00a0Roughly 3,600 of the idled machines can be found in defunct Caesars Entertainment<\/strong> casinos, another 2,200 just in Revel<\/strong>, more still in Biloxi<\/strong>‘s Margaritaville<\/strong> and Atlantic City<\/strong>‘s Trump Plaza<\/strong>. Almost certainly, in the case of Caesars, a significant number of these boxes will find new homes in other casinos, further depressing a wan replacement cycle that is expected to drive down slot sales 29% this year, according to Eilers.<\/p>\n

\u201cOur checks really couldn\u2019t come back much more negative on the outlook for sales for [International Game Technology<\/strong>.] We expect that IGT will continue to see a share loss going forward, which should create an opportunity for the combined Bally<\/strong>–Scientific Games<\/strong> and Multimedia Games<\/strong>,\u201d reported analyst Brian McGill<\/strong>, who described IGT’s business as in “free fall.” Although one would expect rampant consolidation in the manufacturing sector to drive product prices in the slot makers’ favor, a casino industry awash in supply and short of demand can afford to drive hard bargains.<\/p>\n

* Market forces are making themselves felt with a vengeance in Northern California<\/strong>, where Station Casinos<\/strong>-run Graton Resort & Rancheria<\/strong>\u00a0(pictured<\/em>) has \"Graton\"<\/a>dealt a deathly blow to River Rock Casino<\/strong>, owned by the\u00a0Dry Creek Rancheria Band of Pomo<\/strong>. Revenues at River Rock have fallen 50%, and have “caused them to default on payments to investors and miss a $3.5\u00a0million payment to Sonoma County<\/strong>” for police services. By its own admission, River Rock has no Plan B. Meanwhile, bondholders are finding themselves up a very dry creek indeed, as they learn the hard way that when a tribe defaults on what it owes you, there’s no recourse. Or, as one analyst puts it,\u00a0\u201cThere\u2019s no bankruptcy for tribes.\u201d<\/p>\n

County supervisor Mike McGuire<\/strong> put the best face on the problem, saying \u201cIt\u2019s still more [money] than Alexander Valley<\/strong> and Geyserville<\/strong> ever saw prior to the casino being constructed.” For his part, tribal Chairman Harvey Hopkins<\/strong> in waffling, arguing that the payments to the county were contingent on the Dry Creek band building a newer, bigger casino. That’s off the table now. He’s angling for concessions from Sonoma County, including more signage and greater latitude in when and where the casino can serve liquor. He’s just asking, he says, for what Graton Resort already has. McGuire calls the demands “nonstarters.”<\/p>\n

Dry Creek’s problems are magnified by as much as $145 million in long-term debt, a burden it will have to either retire by 2018 or restructure on more favorable terms. “Eviscerated” by the competition, Dry Creek has turned over its financial affairs to a third-party trustee. It’s also halved distributions\u00a0to tribal members. That’s just one of many cutbacks that have been made. Tribes like to present themselves as a united front but, when it comes to the casino business, they’re as unsentimental as the most ruthless capitalist.<\/p>\n","protected":false},"excerpt":{"rendered":"

As the casino industry braces itself for Global Gaming Expo, this could hardly be a worse moment to be hawking slot machines. Not only is it undergoing a painful contraction but new markets (like Boston and Washington, D.C.) are a … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[23,77,34,14,104,7,29,72,112,35,157,160,57,20,169],"tags":[],"_links":{"self":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/14563"}],"collection":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/comments?post=14563"}],"version-history":[{"count":5,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/14563\/revisions"}],"predecessor-version":[{"id":27399,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/posts\/14563\/revisions\/27399"}],"wp:attachment":[{"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/media?parent=14563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/categories?post=14563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lasvegasadvisor.com\/stiffs-and-georges\/wp-json\/wp\/v2\/tags?post=14563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}