Not all gaming markets are moving in the right direction, however. We’ve separated the markets into the categories of The Good, The Less Bad, and The Ugly and have included the tickers of the companies with exposure to each.
• Las Vegas Strip – The only thing worse than the gaming revenue trends are the room rate trends. Unfortunately, room rates have higher margins. (MGM, WYNN, LVS)
• Locals Las Vegas – Won’t overcome a 45% peak-to-trough housing crash this year. Population growth could drive 2010 revenues higher. This market should look Less Bad soon. (BYD)
• Atlantic City – The economy, Pennsylvania, smoking bans, where do we begin? (BYD)
• Mississippi – This was a tweener. We don’t have February data yet and I’m conservative so I’ll throw it in the ugly basket. (ISLE, PNK, PENN)
• Macau – Looks can be deceiving. Tough Rolling Chip comparisons from an overflow of junket credit last year distorts the picture here. By September, this market may skip a category right to The Good. (LVS, WYNN, MGM)