Tags: US | Moodys | Gaming

Moody's Says Casino Industry Still Uncertain

Thursday, 29 Jul 2010 02:18 PM

Moody's says while sharp declines in monthly U.S. casino revenue has started to subside, it is still uncertain when gaming industry trends will improve or whether the improvements last.

Even so, Moody's Investor Service said in a report Thursday its outlook for the U.S. gaming industry remains "Stable," as the monthly revenue declines are easing and "gaming company operating profits are expected to stabilize by the end of 2010."

Keith Foley, a senior vice president at Moody's, said measures states took to address budget deficits, as well higher financing costs for gaming companies and lower spending on development, could hurt the sector "well beyond any recovery."

As a result, several companies that refinanced debt during the recession may have only succeeded in pushing back an inevitable credit crunch, he added.

The economic recovery so far has not brought large numbers of people back to gambling, according to the report. This could be a problem as most U.S. casino companies "do not have the financial flexibility at this time to absorb a year or more of flat profits," said Peggy Holloway, vice president and senior credit officer at Moody's, in a statement.

Las Vegas Sands Corp. and Wynn Resorts Ltd., which have diversified by expanding into Asia, are less affected, Moody's said.

Shares of Las Vegas Sands fell 6 cents to $26.63 in midday trading. Shares of Wynn fell $1.87, or 2.1 percent, to $86.

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