Casinos Not Recession Proof

Someone once said that despite a recession, casinos would continue to rake in money as no other establishments could. I highly doubted it at that time. The way I saw it was that when hard economic times set in, the first thing that will be gotten rid of will be entertainment. This is but common sense – the necessities will definitely remain while the luxuries will be cut off.

Apparently, I was right. I just read a news report on how casinos are now feeling the squeeze of the economic crisis. The Journal Gazette reports:

It turns out casinos aren’t recession-proof after all.

That used to be an economic truism, but it’s been put to the test in the last year, and especially since the start of 2008.

“The last six months have really blown conventional wisdom to smithereens,” said Joseph Weinert, an analyst with Spectrum Gaming Group.

Las Vegas reported its Strip revenues had dropped 16 percent last month. Atlantic City, N.J., had a horrible June as well.

As a result, casino stocks have tumbled. Casinos from Atlantic City to Vegas are being forced to reconsider construction projects, trim their workforces and reduce room rates.

Atlantic City and Las Vegas are two of the most prominent areas which people frequent for some casino action. They have been immortalized in countless movies and TV shows and one would think that they would be the last to suffer in hard economic times. Then again, the data above shows a 16 percent drop in Vegas revenues! Considering just how much they earn over there, a 16 percent drop should be a humongous amount!

I am sure that these big casino cities would be able to hang on, though, don’t you think?