Higher inflation is having an impact across the board in the gaming industry, although some countries are better able to withstand the economic slowdown than others. With food and fuel prices rising, consumers are now watching their budgets and casinos are feeling the effect of fewer casino visitors. In Las Vegas it is not only gambling revenue that has fallen, less money is being spent on shows, dining and shopping. Passenger traffic at McCarran airport in March showed a fourth month-over-month decline since last November.

In early March South Africa’s Sun International CEO David Coutts-Trotter attributed slowing revenue growth to the economic impact on disposable income and consumer confidence. Yesterday this was echoed by a company in Jamaica, Supreme Ventures Limited. The company has put plans to open five new gaming lounges on hold, citing higher oil and food prices and softening economic conditions. Brian George, president of the lottery company, told shareholders at the AGM last week that food trumps gambling, "It's all about disposable income.”

Boyd Gaming has recently indefinitely postponed plans to open slot machine gambling at Dania Jai Alai in Florida although it holds the licence to operate. Lower than expected revenues at the other pari-mutuels in Broward County and new Class III gambling at the Seminole properties are contributory factors in taking the decision. In Nevada some casino projects have been abandoned and others, such as Crown Las Vegas, Cosmopolitan and Tropicana face difficult funding issues.

In the UK it seems that enthusiasm for the new casino licences has waned. Rising inflation and sinking consumer confidence on top of high tax rates and smoking bans will make casinos less profitable even if funds for development are available. Over the last few months Harrah’s has pulled out of major projects in The Bahamas and Slovenia. Ladbrokes, not so long ago keen to get back into casino gaming has stated it no longer has plans to do so. Until everyday costs stabilise and the credit crunch eases, disposable income issues will continue to govern casino fortunes. (E-04.30.08)

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