After years of break-neck building and consolidation in the gaming industry in Las Vegas, are we now poised to witness a deconsolidation — the selling off of individual casinos?
Tourism is in a recession, gaming stocks are beaten up, expansion has been made more difficult by tight credit markets and foreign venues are threatened by unstable governments. Las Vegas gaming companies look primed for a strategic sell-off.
Of course, the old adage that at the right price everything’s for sale has always been true. But that’s usually applied to a market in which there are anxious buyers willing to overpay. In this market, there may be motivated sellers who are willing to let famous properties go at a bargain price just to get their taxes and balance sheets in order and weather what’s left of the rest of this recession.
And what casinos might be on the block? Over the last 6 months, I’ve heard rumors about nearly every big casino house in Las Vegas. For example, one of the more juicy rumors involves Steve Wynn buying back the Bellagio. Another has him snagging a Sheldon Adelson property. Or, some wagging tongues say it’s the other way around. Such are the rumors of Las Vegas. They are nothing if not creative.
What we do know is that it’s a hard environment for all casinos in Las Vegas. MGM, Harrah’s and Boyd are all scrambling for ways to stay ahead of eroding revenue. Even companies with the best management, like Stations Casinos, are feeling the pinch.
Stay tuned for a very interesting time. The rumors of individual casino sales are out there. They may just be rumors. But the market forces are undeniable. I’ll bet the line-up of casino ownership is going to look a little different by the end of 2009.