The most challenging period for Las Vegas and its largest industry, gaming and hospitality, appears to be in the rearview mirror, according to a report released Thursday.
In its report, the Newmark Grubb Knight Frank Global Gaming Group expect total revenue generated by properties on the Strip to increase between 1.5 percent and 5.3 percent in 2013, assuming a negligible increase in the supply of hotel rooms.
“Improvements in U.S. household net worth, an important leading indicator for Strip revenue performance, should provide baseline support for 2013,” said Brent Pirosch, director of Gaming Consulting for NGKF’s Global Gaming Group.
Pirosch noted that softness in the U.S. housing market, along with “a fragile recovery and ongoing economic uncertainty in the U.S. and abroad will keep 2013 revenue growth on the Las Vegas Strip at modest levels.”
In a 70-page report, the analysts said the Strip was in a good spot in 2012, with revenue growth at the upper end of their forecast.
“We identified total revenues growth of 1.9 percent to 5.7 percent, and revenue on the Strip has grown
4 percent,” said Pirosch, co-author of the report.
But the report cautions that a downturn in the housing market of 5 percent to 10 percent as well as a 10 percent to 20 percent drop in the stock market, could force revenues down by 2 percent to 8 percent.
Caesars Entertainment hires CFO
Caesars Entertainment Corp. went outside the gaming industry and named Donald Colvin as chief financial officer on Thursday.
Colvin served in a similar position with ON Semiconductor Corp. from April 2003 until October. Before joining ON Semiconductor, he held a number of financial leadership and CFO positions with Atmel Corp., European Silicon Structures and several financial roles at Motorola Inc.
Colvin replaces Jonathan Halkyard, who left the casino operator in the summer to become CFO at NV Energy.
Rating service downgrades Borgata
Fitch Ratings Service affirmed its view of Boyd Gaming Corp., but downgraded the company’s Borgata in Atlantic City in light of impact on the market from Hurricane Sandy and increased competition.
Boyd owns 50 percent of the Borgata and operates the hotel-casino. MGM Resorts International owns the other half of the property but has placed the holdings in trust as it moves to sell its stake.
Fitch said increased competition from the Revel in Atlantic City, which opened in May, and competition from casinos in New York, Pennsylvania, Delaware and Maryland could slice into Borgata’s market share.
The downgrade also took into account the five-day closure of the Borgata from Hurricane Sandy. Fitch said the impact from the storm was uncertain.
The ratings service still had an overall healthy view of Boyd Gaming and was supportive of the company’s planned $1.45 billion buyout of Peninsula Gaming, which is expected to close next month.
MGM Resorts International gets online poker license
MGM Resorts International’s planned online gaming subsidiary was licensed Thursday by the Nevada Gaming Commission to operate an interactive poker website in Nevada.
MGM Resorts officials told regulators the company would wait until real-money poker and casino online company Bwin.party Digital Entertainment Plc. is licensed by the state before launching its website.
Bwin.party, MGM Resorts and Boyd Gaming Corp., have a partnership agreement to operate online poker in Nevada and throughout the United States if Congress legalizes the activity.
Slot machine maker names new CEO
Bally Technologies announced Wednesday that Ramesh Srinivasan will become chief executive officer of the Las Vegas-based slot machine manufacturer.
Srinivasan, 52, who will also join the company’s board, replaces Richard Haddrill, who will become Bally’s chairman.
The transition takes effect Dec. 31.