What is indisputable (for people willing to do the work) is that non-replacement sales will fall off a cliff in 1H 2009. We estimate a 60% year over year decline in unit sales to new casinos and expansions over that time period. There just aren’t a lot of new opportunities and the comp is extremely difficult. The M Resort in Las Vegas, PENN’s Lawrenceburg expansion, and Sands Bethworks are the only major shipments expected in 1H 2009. As can be seen in the chart, 2010 will not provide a recovery either. Q4 2008 looks pretty good and maybe that is why the slot guys seem overly optimistic right now. The good times won’t last.
Despite the liquidity crunch and significantly fewer new casinos and expansions, analysts somehow believe BYI and WMS can grow revs by almost 10% and total unit sales growth for the sector in 1H 2009 will be positive. Go figure.