Stock Market Not Gambling On Casinos Like They Used To

Casino stocks used to be the closest thing to a safe bet as was available through the stock market. Casino gambling in Atlantic City and Las Vegas would go on no matter what state the economy was in.

Times have changed for casinos, however, and it has caused a change in their stock value as well. They no longer are the sure bet answer for stock gamblers looking to make money.

The casino landscape is one of the main reasons the casino stocks are no longer a safe bet. Casinos have been going up all across the country. That is in addition to the riverboat and Native American casino expansion.

The casinos now offer more than just gambling. They have become mega-resorts that offer fine dining, shopping, entertainment, and lounging. Therefore, to maintain their stock value the casinos have to keep their places full.

That is a difficult task in today's economy. The public is less likely to spend money in all areas of their casino trips, leaving hotel rooms not filled to their capacity.

Although the casino expansion is one reason for the stock drop, according to Thomas Weisel Partners Hospitality Analyst, Jake Fuller.

"A bigger factor is, it's not just gambling anymore. Most of the big casino companies derive over half of their revenue from rooms, from restaurants, from retail, from entertainment, things that are more discretionary, more susceptible to the casino pullback," he told CNBC.

With each day that the economy goes deeper into trouble, the stocks of these casinos drop to more of an unsafe bet.

July 8, 2008
Posted By Susan Torres
Staff Editor, CasinoGamblingWeb.com
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