Casino groups under more pressure as investors hold back
Sunday 19th October 2008
As we have covered over the last few weeks there has been a marked change in the attitude of investors towards casino shares. We have seen a number of substantial downgrades, we have seen shares fall but is the worst over or is there more to come?
The industry as a whole has been hit on three sides with the worldwide economic slowdown affecting the flow of funds into the sector, the smoking ban in the US having a major impact in many parts of the country and to cap it all we have the Kentucky situation where long term online gambling websites are under serious threat.
The bizarre thing is that online gaming had been holding up better than offline casinos prior to the Kentucky trial but now there are growing doubts about the ability of many online sites to operate in the longer term. The attack by the state of Kentucky could well be the first of many such court cases by a country which actually depends upon gaming for a lot of its state by state income.
Quite when we will see some good news remains to be seen.
As we have covered over the last few weeks there has been a marked change in the attitude of investors towards casino shares. We have seen a number of substantial downgrades, we have seen shares fall but is the worst over or is there more to come?