It’s an interesting concept – that by diversifying the gambling industry has exacerbated its present situation. As has been pointed out many times, this economic downturn is unlike others when casinos have proved to be almost recession proof. With much of gaming company profits now coming from other forms of entertainment and sales revenues, the fact that people are travelling less and spending less is hurting. This time round the amount of money gambled is also falling.

Analysts consider that the economic climate, particularly in the United States, is unlikely to improve until at least mid-2009. Until that time, and maybe even longer, some gaming companies will continue to struggle with debt problems. Debt that was accumulated when times were good, credit available on easy terms and expansion was the name of the game. Bankruptcy filings are expected to increase and the old adage that casinos are a licence to print money seems even further from the truth.

The New Jersey Casino Control Commission yesterday published figures for July. The casino win of US$438.7 million was down 6.6% from July 2007. Slot revenue was down 7.2% and tables down 5.1%. Revenue for the first seven months of 2008 is down 6.1% from the same period last year. Nevada gaming revenues are also declining – 1.1% in June but July is expected to have been worse.

It is not only the gaming companies that are having to reassess operating costs and expansion programmes. State governments are looking at belt tightening measures as gaming tax revenues also shrink. Smoking bans initiated in several states have already cut income for both operators and authorities. Increasing competition, harder economic conditions, even the climate, are all turning 2008 into a challenging year for the gaming industry – a challenge that may prove to be too great for some. (E-08.12.08)

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