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\tThe Harrah\u2019s casino in Tunica, Miss., features a spa, three pools, a golf course, and a shooting range. But there\u2019s one thing the 18-year-old facility, the largest of 10 casinos in the area, sorely lacks: gamblers. The northern Mississippi casino industry saw gaming revenue shrink to $738 million last year from $1.2 billion in 2006. So Harrah\u2019s parent, Caesars Entertainment (CZR), will shutter the resort on June 2, putting as many as 1,300 employees out of work. \u201cThere\u2019s just too much supply in that market,\u201d says John Payne, president of Caesars\u2019s central markets division, which will concentrate on two other casinos it owns in Tunica. \u201cThe Harrah\u2019s has not been profitable for a while.\u201d<\/p>\n
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\tThe closing could be a sign of things to come as the $38 billion U.S. gambling industry bumps up against two unlucky trends, a proliferation of casinos and still-skittish consumers in the wake of the financial crisis. Some 39 states have casino gambling of some kind, up from only two in 1988, and more Las Vegas-style resorts are on the way in New York, Pennsylvania, Massachusetts, and Maryland. \u201cThey have saturation problems,\u201d says William Thompson, a professor at the University of Nevada at Las Vegas who studies the industry. \u201cWe have a wave of new casinos coming.\u201d<\/p>\n
\tIn January, New Jersey\u2019s Atlantic Club Casino Hotel, formerly the Atlantic City Hilton, shut its doors, a victim of increased competition in the mid-Atlantic region. Gambling revenue in the Garden State has fallen 44 percent since its peak in 2006. Five of Atlantic City\u2019s 11 remaining casinos lost money on an operating basis in the nine months through September, according to the state\u2019s Division of Gaming Enforcement.<\/p>\n
\tCasino revenue fell in February for the sixth consecutive month in the four largest Midwest gambling states, Indiana, Missouri, Illinois, and Michigan. Even in Las Vegas sales are down 12 percent so far this year.<\/p>\n
\tSTORY: New Jersey’s Casinos Are Sinking Faster Than Online Gambling Can Rise
\n\tOn March 25, International Game Technology (IGT), the world\u2019s largest slot machine maker, said it would reduce its global workforce by 7 percent, or 350 people, citing a decrease in its North American gambling operations. \u201cIt\u2019s been broad-based jurisdictionally, and the declines have been greater than we had anticipated,\u201d IGT Chief Executive Officer Patti Hart said during a March 26 investors call. The company, which collects a share of money bet on some of its leased machines, reported an 8 percent sales decline in that business in the quarter ended in December.<\/p>\n
\tLast year\u2019s increase in payroll taxes appears to be crimping the budgets of many gamblers. \u201cGaming can skew a little more blue-collar and middle-income, and if you look at the national economic statistics, that\u2019s a subset that remains challenged,\u201d says Joel Simkins, an analyst with Credit Suisse (CS). \u201cWe need a much more robust economic climate for some of these markets to do better.\u201d<\/p>\n
\tThe irony is that it was the economic downturn that prompted several states to expand their gambling offerings as a way to increase tax revenue. Maryland voters approved the state\u2019s first casinos in a 2008 referendum. Massachusetts legislators joined them in 2011. Illinois began rolling out slot machines in bars in 2012. New York voters approved a maximum of seven resorts last year.<\/p>\n
\tSTORY: Why New Jersey Fell Far Short of Online Gambling Expectations
\n\tFinancial projections have often been made with a gambler\u2019s sense of optimism. Ohio voters were told to expect more than $1.42 billion annually in gambling revenue when they approved the state\u2019s first four casinos in 2009. The take was $821 million last year.<\/p>\n
\tOhio\u2019s budget office issued a memo on March 19 warning local governments and school districts, which receive the bulk of the state\u2019s gambling tax revenue, to budget conservatively and \u201cnot be surprised\u201d when forecasts fall short. \u201cCompetition for gambling dollars is increasing, both within and without the state, and there is evidence across the nation that overall gambling may be approaching saturation levels,\u201d budget officials said.<\/p>\n
\tHollywood Casino, a $400 million property in Columbus, Ohio, began reducing its slot machine count two months after opening in October 2012. Since then about 500 machines, or 17 percent of its total, have been taken out because of weak demand.<\/p>\n
\tAmeet Patel, general manager of the property, says the softness in casino revenue that he and other operators have seen has been driven by a key demographic: women older than 50 who used to bet $50 to $75 per visit. The weak recovery has squeezed their gambling budgets, and their trips to casinos are fewer, he says. \u201cThe low end has been wiped out,\u201d he adds. Hollywood Casino\u2019s owner, Penn National Gaming (PENN), says it still expects returns of 20 percent on its new casino investments and is pursuing projects in Pennsylvania and Massachusetts.<\/p>\n
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The Harrah\u2019s casino in Tunica, Miss., features a spa, three pools, a golf course, and a shooting range. But there\u2019s one thing the 18-year-old facility, the largest of 10 casinos in the area, sorely lacks: gamblers. The northern Mississippi casino…<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7199","post","type-post","status-publish","format-standard","hentry","category-latest-casino-news"],"_links":{"self":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7199","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/comments?post=7199"}],"version-history":[{"count":0,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7199\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/media?parent=7199"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/categories?post=7199"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/tags?post=7199"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}