As the bankruptcy reorganization of Station Casino and Herbst Gaming comes to an end, analysts and industry watchers have turned their focus to other casino operators. Speculation is rife about whether companies will follow the Station and Herbst to file bankruptcy court-controlled reorganization plans to eliminate cumbersome debt on the books and create more manageable businesses.
Others believe the company’s gaming executives have done enough to rebalance long-term debt. Some of the biggest casino operators have negotiated an extension to the maturity date through new debt additions, interest rate hikes or a combination of acquiring new partners and investors.
Smaller independent casinos also have debt management problems. Riviera’s operators filed for bankruptcy protection in July. M Resort’s main lender held a private auction to sell $700 million of the property’s debt.
“Most big businesses have bought themselves for some time,” said Dennis Farrell Jr., a game analyst at Wells Fargo Securities. “With one-off real estate, we’re seeing a lot of debt deals with people building positions to take control.” Farrell said that unless there was another severe recession, major casino operators did their best to avoid bankruptcy.
“Most of these companies have cut costs as much as possible,” Farrell said. “There’s not much else that can be cut without sacrificing services. If they haven’t filed (for bankruptcy) yet, I think it’s time.” The next step for most heavily indebted casino operators will be determined by the performance of various gaming jurisdictions by the end of the year.
The strip’s results will have a significant impact on MGM Resorts International (10 strip hotel casinos, including City Center’s Aria) and Hara Entertainment (9 strip hotel casinos, including Rio). Companies concentrated in Atlantic City (Harah’s, home to four of the 11 casinos in the coastal area) will be hard pressed to succeed. The market has suffered 23 consecutive months of declining gaming revenue, with no prospect of a rebound at all.
“Trend and spending levels in Las Vegas strips can still be characterized by less deterioration,” JP Morgan gaming analyst Joe Greff told investors in a recent report looking at gaming results for the first six months of the year. In the first six months of the year, Streep’s gaming revenue rose 2.6 percent. Gref wrote that convention reservations also seem to be on the rise. 에볼루션 바카라사이트
“The next relevant data point will be September, with the group business likely to return and a positive impact on the room mix,” he said. For regional markets, Pennsylvania and Colorado are showing signs of growth, mainly due to regulatory changes. While Colorado has increased its betting limits and allowed casinos to operate for 24 hours, Pennsylvania has allowed the addition of table games to its slot machine-only casinos.
Meanwhile, Macau continued to enjoy a boom in game sales through July, a 70 percent increase from 2009. Such figures help it weather the decline in Las Vegas figures for leading Macau markets – Las Vegas Sands Corp. and Win Resorts Corp. Las Vegas Sands has also invested $5.7 billion in Marina Bay Sands, the company’s Singapore resort, which opened in April, to earn financial returns.
“The initial game revenue results in Singapore are very encouraging and we propose a very deep market that needs to generate very high cash flow margins, reflecting an attractive dual-point market located in Asia’s financial hub with relatively low game tax rates,” Greff said.
