Casino Profits Rise While Stocks Continue To Slide
In most business cases, revenue is directly tied to the direction that company stock will go. In the gaming industry, however, an interesting trend has started in recent weeks of stock prices falling while revenue rises.
The economic recession of 2008 was the first economic crisis in history that affected the casino industry heavily. Casinos were once thought to be immune to the economic conditions of the country, but in 2008 gaming establishments all across the US proved that idea to be a farce.
Revenue has been declining for many months in a row in popular gaming cities such as Las Vegas and Atlantic City. The two gaming havens have been the most successful casino revenue producers in the country for decades, but now other states are starting to take that distinction away.
Pennsylvania is the most notable state that is threatening the monopoly that Nevada and New Jersey have enjoyed within the gaming industry. Since Pennsylvania casinos began offering table games last summer, the state has approached New Jersey in overall gaming revenue. Analysts predict that by the end of 2012, Pennsylvania casinos will have passed New Jersey casinos in total revenue.
In the past two months, casinos around the country have experienced a resurgence of sorts. Las Vegas has seen an increase in revenue at their casinos, as have casinos in Mississippi, and Louisiana. While revenue is increasing, the fear factor associated with the economic conditions in the US is again driving down gaming stock prices.
On Monday, almost all of the major gaming companies experienced a decline in stock price, although it was not as bad as the drops they experienced last week. Boyd Gaming had the biggest decline in terms of percentage, falling 4.86%, to $5.09 a share. MGM Resorts International and Monarch Casino & Resorts both fell over 3.5%.
On the lower end of the declining stock prices was Wynn Resorts at a 1.04% decline. Wynn's stock price remained the most lucrative of all US gaming stocks at $129.98 a share. Las Vegas Sands is another company that has prospered greatly in the past year, but their stock dropped as well Monday, falling to $40.57, down almost two percent.
August 23, 2011
Posted By April Gardner
Staff Editor, CasinoGamblingWeb.com
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