The growing casino glut - ISLE downgraded to price target $4.00
We did a post last week detailing how casinos were not paying off as expected for many states. Now here comes more evidence that there are not enough gamblers to fill all of the casinos that have opened in recent years. Isle's Cape Girardeau is one of them.
For example, Revenues were down 9 percent at casinos in Mississippi. The amount of money the state pulled in from the casinos was the lowest it has been since 1997. Isle's rebranded Lady Luck Vicksburg is suffering from lack of revenue and an outdated gambling experience even with its recent renovation.
The decrease in revenue was blamed in part by increased competition from casinos in Arkansas. The weak economy was also blamed. Revenues were down almost 8 percent at a casino in Illinois. Revenues were also down at the two large Indian casinos in Connecticut. Even Las Vegas and Atlantic City recently saw a big drop in revenues.
The drop in revenues does not bode well for other states, like New York and Massachusetts, that are scrambling to get in the casino game. While those states may do well when the casinos first open, history shows the revenue numbers will eventually trail off, forcing states to do more to replace the unsustainable casino revenues. The growing casino glut is adding to the problems for many states.