Column: All is not well on Indian gaming front

Monday, September 29, 2008  

"The delay of a $734 million expansion at the Mohegan Sun casino in Connecticut says as much about the economic state of the gaming industry as the Aug. 1 announcement by Boyd Gaming Corp. that it was halting construction of the $4.8 billion Echelon.

Financially, all is not well.

Deutsche Bank analyst Andrew Zarnett thought the Mohegan Tribe made a wise move in pushing back construction of a 922-room hotel tower and House of Blues theater by at least a year. He had a similar reaction when Boyd put the brakes on Echelon.

"This suspension is likely to last longer due to deteriorating industry fundamentals along with the need to potentially redo bank and bond covenants," Zarnett told investors.

He also said historical high leverage levels permitted by banks are a thing of the past.

The casino industry is facing an increasingly difficult economic environment that is pressuring cash flows and balance sheets."

Get the Story:
Howard Stutz's INSIDE GAMING: It's plain that pain's a regular refrain (The Las Vegas Review-Journal 9/28)

Another View:
CT Review: Economic Downturn Delays Casino Expansion Plans (The Hartford Courant 9/28)
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