Moody’s Investors Service, a leading Wall Street research, credit rating and risk analysis agency, released a report on April 16 detailing a bleak financial picture for regional casinos in the U.S.
The report, titled “U.S. Gaming: The Walls are Closing in on Regional Casinos,” highlights four reasons for the dreary outlook:
- There are no growth catalysts in sight
- Longer-term industry fundamentals look bleak
- Younger generations have many entertainment options and are less enthused about gambling
- Debt on highly-leveraged properties is maturing
The report notes that regional casinos rely heavily on slots and table games for the vast majority of their revenue. Even though many regional casinos offer “non-gambling products” like restaurants, hotel rooms, retail and conference space, they draw primarily local customers and therefore are subject to local market conditions.
“The Spectrum Gaming Report commissioned by the Florida Legislature last year concluded that 95% of customers to any new gambling venues in Florida would be locals, not tourists,” said Paul Seago, Executive Director of No Casinos. “A high percentage of visitors to Florida live a short drive from a casino at home, so why would they come here to gamble? The Moody’s report underscores a major point: casinos desperately need Florida, but we don’t need them.”