Gaming Index Backs Off Recovery

LAS VEGAS-Valuations within the gaming sector fell back in June after two consecutive monthly increases, according to locally based Applied Analysis, which maintains the Applied Analysis Gaming Index. The Index, which tracks 10 publicly traded gaming-related companies, fell by 7 points to 233.03, a 2.9% decline.

Gaming operators contributed to the decline with a 10.2-point drop in value that was partially offset by a 3.2-point pick-up by gaming equipment manufacturers. International Game Technology and Bally Technologies each posted month-to-month gains in their monthly average stock prices, while the balance of the sector, gaming operators, witnessed weakening demand for their stocks.

The decline in valuations is being attributed to concerns regarding the depth and breadth of the national recession as hotels slash room rates to maintain occupancy as visitation and consumer spending indicators remain well of their peaks. “The consumer mix is having an impact on all revenue sources and a disproportionate effect on the margin,” states the report accompanying the index. “The high-profile bankruptcy filing of Fontainebleau Las Vegas, a multi-billion construction project on the Las Vegas Strip, also brought increased attention to the sector and the challenges that exist.”