Moody’s Investors Service, citing declining gaming revenues at casinos across the U.S., downgraded its outlook on the U.S. casino industry from “stable” to “negative.”
“We now estimate that total U.S. gaming revenues reported by state gaming authorities will decrease between 3.0 percent and 5.0 percent during the next 12 to 18 months, causing overall industry (earnings before interest and tax) to decline between 4.5 percent and 7.5 percent,” wrote Moody’s analyst and Senior Vice President Keith Foley in the report.
The Moody’s report offers a broad look at the casino and gambling market, which is becoming diluted with new and expanded gaming facilities in the Northeast and elsewhere.
States showing declines in gaming revenue for at least two of the three months that Moody’s examined included Connecticut, Colorado, Delaware, New Jersey, Illinois, Kansas, Indiana, Iowa, Michigan, Louisiana, New York, Missouri and Pennsylvania.
“Gaming revenues typically account for a substantial majority of net revenues for U.S. regional gaming companies, in some cases up to 85 percent,” said the report, naming states outside of Maryland and Ohio, which each posted big gains in gaming revenue. Despite weaknesses in regional markets, the Las Vegas Strip is doing relatively well, Foley wrote in the report.
