HARTFORD, Conn. (AP) — Demographic and industry problems are weighing on casinos struggling to draw visitors and increase revenue, an industry analyst said Thursday.
Economic growth will slow as the population of older Americans outpaces younger consumers who are “less enthused” about gambling, turning instead to electronic games or watching online entertainment, Keith Foley, an analyst at Moody’s Investors Service, wrote in an investors note.
“The regional gaming industry has been struggling for some time to increase revenues as consumers continue to count their discretionary dollars,” he said. “At this point, there is little to suggest this dynamic will change any time soon.”
Regional casino companies also are falling short in generating a more diverse source of revenue among gambling, retail, restaurants and entertainment, Foley said. The casinos receive 65 to 85 percent of revenue and earnings from slot machines and table games.
In contrast, Wynn Las Vegas receives more than 60 percent of gross revenue from nongambling amenities, which also accounts for a little more than 50 percent at MGM Resorts International.
It was a model that many regional operators believed “would be key to maintaining and growing their customer base over the long term,” Foley said.
A heavy reliance on slots and table games puts regional casinos at risk as an older generation that spends time at slot machines and table games is replaced by younger gamblers “shaped by technology that can get its entertainment satisfaction in ways that older generations couldn’t,” Foley said.
Christopher Moyer, a spokesman for the American Gaming Association, said research shows a majority of casino visitors are still younger than 50. He said the group has been working to help the industry adapt to a highly competitive entertainment landscape.
“It is incumbent upon states to find ways to maximize the many benefits gaming provides a community, and we have long recognized the importance of finding new ways to make our product as compelling as possible to the millions of Americans who enjoy casino gaming each year,” he said.
