In another sign of the economic downturn, many of the major casino holding companies have announced severe shortages in revenue during the third quarter of this year. Shares of Wynn Resorts, owners of the Wynn and Encore properties on the Las Vegas Strip and the Wynn Macau near Hong Kong, dropped by more than ten percent, in spite of earnings that exceeded Wall Street’s expectations.
Another Las Vegas casino powerhouse is Boyd Gaming Company. As opposed to the decadent opulence of the Wynn properties, Boyd owns such properties as the Fremont, California and Main Street Station casinos in downtown Las Vegas. Although Boyd properties cater more to locals and down-market visitors, shares in the company went down almost fifteen percent after they announced that their earnings per share fell short of investor forecasts.
The world’s biggest casino companies also took some of the biggest hits to their stock. MGM Mirage, which operates Las Vegas Strip landmarks like the MGM Grand, Bellagio, and New York New York, saw their share price fall twelve percent. Shares in Las Vegas Sands Corp., which runs the Venetian and the Palazzo in Las Vegas as well as a casino in Macau, dropped eleven percent.
The largest casino operator in the world, Harrah’s Entertainment, took the worst blows of all. Last year, two private equity firms acquired the casino giant. Since the company went private, they no longer issue stocks or must make their financial records public. However, company officials did announce that the casino had a revenue shortfall of over US$70 million compared to this point last year and showed a loss of US$1.6 billion.
The decline in casino revenues means that operators are not spending money on new gaming equipment. This trend has also led to a drop in the sale of gaming machines, such as slot machines and video poker games. The leading makers of slot machines, International Gaming Technology (IGT) and Bally Technologies, Inc., also saw their share prices drop, with each firm suffering a seven-percent decline.
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