Going to the Dogs: Casino Stocks Plunge and Hooters Teeters
by Jack Prophet | Aug 9 2011
Can't We Comp Them Some Buffet Tickets Or Something?It appears that no one is safe from the stock market reaction to the U.S. getting its credit score chopped and that includes some of the biggest names in gambling. The recent Dow Jones slide has taken pretty much every sector of the economy down with it so it should be no surprise that land based casino operators will see some fallout as well.
Online casino operators are not publicly traded on U.S. stock exchanges and so remain unaffected.
What is a bit unique however is that several of the stocks affected in yesterday's trading are reporting excellent financial results. Las Vegas Sands Corporation recently announced that it had beaten predictions for the quarter, and
Steve Wynn has been trumpeting his plus 51% year over year quarter earnings. The MGM group beat predictions as well, and all three groups are seeing explosive growth and profits out of their Macau operations.
That did not deter the market, however, as all three companies lost ground. Both MGM and Las Vegas Sands Corporation were down a substantial 6% in early morning trading. Wynn Resorts was down just over 5% while the Boyd Gaming group lost the most with 8% of its stock value disappearing. Ultimately these are significant numbers and have to have management and directors concerned.
Further bad news for the gaming sector followed as Bloomberg News wrote in their Consumer Comfort Index Report that consumer confidence was extremely low. Issues such as the deepening European Credit Crisis and the Debt Ceiling political turmoil had people worried about losing their jobs. Typically this translates to consumers starting to cut back on entertainment and travel, and thus trips to locales such as Las Vegas, Atlantic City, and Mississippi.
For exciting casino action and all the latest games play online at the Bodog Casino today!Downsize This!More tragic news from Las Vegas as the continuing recession and U.S. debt crisis continue to leave a trail of innocent collateral damage in their wake. The latest victim appears to be the Hooters Casino Hotel.
Struggling under a top heavy debt load, Hooters has had to do the unthinkable and file for bankruptcy. By declaring bankruptcy Hooters can then continue to operate under Chapter 11 while being protected from its creditors.
This move has been hotly contested by its main creditor which is the unimaginatively monikered Canpartners Realty Holding Co. IV, LLC. The company owns 177 million dollars in credit notes for which it has paid the astoundingly small amount of 42 million dollars. According to Hooters management, Canpartners has been sniffing around the property like a villain in an old silent picture show while all Hooters wants to do is restructure its debt.
All is not lost however, should Hooters Hotel Casino fortunes continue to sag. It will be of comfort to all Hooters aficionados to note that the chain of Hooters restaurants will not be affected by any of this as they are owned by different companies. Thankfully, “delightfully tacky, yet unrefined” is here to stay.
There is No Money Sweeter than Casino Lobby Money Things continue to look gloomy for Florida Republican Representative David Rivera as the ethics probe around his financial shenanigans continues. For several months prior to his election, the rookie politician had been rumoured to be under investigation from the I.R.S. and law enforcement. According to Florida newspapers, he is being scrutinized for tax evasion by not declaring a million dollar lobbying payment from a local dog track that was looking to become a casino.
It seems what made the I.R.S. curious is that the payment was made instead to another company which surprisingly happened to be owned by Rivera's mother. Rivera's mother then loaned her son 137,000 dollars out of the goodness of her heart etc. The Feds however don't seem too blinded by this accounting convolution. Although no charges have been laid to date, they are also apparently looking at additional casino lobbying income that went undeclared.
Not all is doom and gloom thankfully, as things have worked out well for the dog track which is now operating very successfully as the Magic City Casino. No word on what happened to the dogs.
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