Don’t look to the tribes to offset the precipitous drop in slot sales everywhere else. Their casinos are struggling too. Layoffs and expansion delays are indicative of the slowdown. Tribal casinos also tend to be more one-off in terms of location. In these less competitive markets, the pressure to offer the latest and greatest slots is diminished. Tribes do not have to buy slots either.
As we’ve written about extensively over the past few weeks, slot sales are likely to be down considerably in 1H 2009 after a likely strong December quarter. Slot sales to new casinos and casino expansions could be down around 50%. Replacement demand should fall as well despite an easy comparison, as corporate CFO’s reign in Capex to stave off liquidity issues.
Throw a tribal casino downturn into the mix and the picture isn’t pretty. The following are just some examples of tribes cutting back:
• Pechanga laid off 368 workers, or 8 percent of its workforce
• Morongo Casino, also in southern CA laid off 95 casino workers
• Thunder Valley Casino, managed by Station Casinos, stopped construction on a hotel and will likely downsize the project.
• Foxwoods laid off 700 workers.
• Mohegan Sun cut 600 jobs through attrition and there are rumors of layoffs for early 2009
• Odawa Casino in northern MI laid off 100 employees
As we’ve written about extensively over the past few weeks, slot sales are likely to be down considerably in 1H 2009 after a likely strong December quarter. Slot sales to new casinos and casino expansions could be down around 50%. Replacement demand should fall as well despite an easy comparison, as corporate CFO’s reign in Capex to stave off liquidity issues.
Throw a tribal casino downturn into the mix and the picture isn’t pretty. The following are just some examples of tribes cutting back:
• Pechanga laid off 368 workers, or 8 percent of its workforce
• Morongo Casino, also in southern CA laid off 95 casino workers
• Thunder Valley Casino, managed by Station Casinos, stopped construction on a hotel and will likely downsize the project.
• Foxwoods laid off 700 workers.
• Mohegan Sun cut 600 jobs through attrition and there are rumors of layoffs for early 2009
• Odawa Casino in northern MI laid off 100 employees
Foxwoods laid off 700 employees
