Mississippi River flooding hurts small gaming operators, says Moody’s

Last month’s Mississippi river flooding that closed casinos in three states for extended time periods could pressure the earnings of small gaming operators.

In a report to investors, Moody's Investors Service said the business disruptions could further delay the recovery in regional gaming markets.

Moody’s analyst John Zhao said the flooding forced the closing of the largest number of casinos in the region since Hurricane Katrina in 2005.

"Casino closures for three to six weeks will on average cut around 5 percent to 10 percent of annual revenue, and operating income will also suffer, especially for those casinos that continued to pay employees during the closures," Zhao said.

Zhao said small casino companies were the most vulnerable and Moody's recently downgraded Legends Gaming after it closed one of its two casinos.

Larger casino operators, including Peninsula Gaming and Isle of Capri Casinos, were more insulated “thanks to their strong liquidity positions and, in Isle's case, geographic diversity,” he said.

The Mississippi river floods have also affected other industries throughout the region, including agricultural crops such as corn, wheat, soybeans and rice.

Moody's Analytics estimates Mississippi's crop damage could total approximately $200 million, roughly 10 percent of annual crop and animal production.

Moody’s said recovery of the region's gaming markets could be threatened just as they had started to improve.