The gambling industry, riding high not so long ago, is now facing lawsuits, bankruptcies and declining revenues. Station Casinos is looking at taking the bankruptcy option and Herbst Gaming has already taken that route, announcing yesterday that it had filed for Chapter 11 bankruptcy protection based on a previously arranged deal with its lenders. Progressive Gaming International filed for Chapter 7 bankruptcy last week.

Developer Infinity World, the subsidiary of Dubai World, has filed a lawsuit against MGM Mirage in Delaware. Infinity has said that the lawsuit is to ‘protect its rights and the best interests of the CityCenter project’ and feels that recent financial statements from MGM Mirage put the project at risk. In its latest annual report MGM Mirage warned a possible default on CityCenter could force the company to seek bankruptcy protection.

The ban on sports betting in all but four of the US states has headed for the law courts also. New Jersey Senator Raymond Lesniak is asking the courts to overturn the federal ban on the grounds that it is unconstitutional as it discriminates against 46 states. The sports betting option was turned down by New Jersey lawmakers in 1992 but with Atlantic City casinos suffering an unprecedented fall in gambling revenue the addition of sports betting is being seen as a lucrative new money making prospect.
(E-03.23.09)

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