As we monitor the legal and political battle surrounding a proposed Catawba Indian casino in Cleveland County, the latest Bloomberg Businessweek offers an interesting assessment of the casino business.
The Harrah’s casino in Tunica, Miss., features a spa, three pools, a golf course, and a shooting range. But there’s one thing the 18-year-old facility, the largest of 10 casinos in the area, sorely lacks: gamblers. The northern Mississippi casino industry saw gaming revenue shrink to $738 million last year from $1.2 billion in 2006. So Harrah’s parent, Caesars Entertainment (CZR), will shutter the resort on June 2, putting as many as 1,300 employees out of work. “There’s just too much supply in that market,” says John Payne, president of Caesars’s central markets division, which will concentrate on two other casinos it owns in Tunica. “The Harrah’s has not been profitable for a while.”
The closing could be a sign of things to come as the $38 billion U.S. gambling industry bumps up against two unlucky trends, a proliferation of casinos and still-skittish consumers in the wake of the financial crisis. Some 39 states have casino gambling of some kind, up from only two in 1988, and more Las Vegas-style resorts are on the way in New York, Pennsylvania, Massachusetts, and Maryland. “They have saturation problems,” says William Thompson, a professor at the University of Nevada at Las Vegas who studies the industry. “We have a wave of new casinos coming.”
In January, New Jersey’s Atlantic Club Casino Hotel, formerly the Atlantic City Hilton, shut its doors, a victim of increased competition in the mid-Atlantic region. Gambling revenue in the Garden State has fallen 44 percent since its peak in 2006. Five of Atlantic City’s 11 remaining casinos lost money on an operating basis in the nine months through September, according to the state’s Division of Gaming Enforcement.
Casino revenue fell in February for the sixth consecutive month in the four largest Midwest gambling states, Indiana, Missouri, Illinois, and Michigan. Even in Las Vegas sales are down 12 percent so far this year.