Casinos.co.uk: Casino News Archive
Monday 19th July 2004
Record year for US Casino industry
Deutsche Bank Securities have released figures regarding the value of mergers and acquisitions in the US casino industry so far this year. At a total of US$21 billion, the figure for the year so far is an extraordinary 43 percent of the total figure for the past 10 years. This announcement follows two of the biggest mergers in casino history- with the MGM Mirage merger with Mandalay Resorts being followed by Harrah’s takeover of Caesar’s Entertainment.
CIBC World Markets analyst Jacques Cornet made the following comment regarding the unusual year: 'I'd argue that in terms of opportunities to get bigger, there are more opportunities today in gaming than we've seen in 10 year...Consolidation should continue. We're in a period where everyone will have to re-examine themselves.'
The result of the action of the year so far has been that MGM Mirage and Harrah’s now dominate the industry as the two largest companies – between them they control more than 60 percent of the strip in Las Vegas. However both companies may be forced to sell off some assets in the future, to settle antitrust issues, which may create opportunities for smaller companies.
Eric Hausler of Susquehanna Financial Group supports this idea with his comments, 'You're going to see small companies consolidate as well...The industry has been consolidating for the better part of 10 years. This ... is the last stage of that cycle, and that can last months or years.'
The dominance of the two main players however, has led to speculation that prices at the resorts for gamblers will increase, due to decreasing competition in the industry. Anthony Curtis , publisher of the Las Vegas Advisor and industry expert defies that theory, saying that changes in prices have more to do with tourism trends as a whole, and specifically travel trends. Curtis believes there will be no significant increase in costs for gamblers, as MGM is buying a company that already caters to higher paying customers, and Harrah’s has a reputation for providing good value for money for its customers.
Source:OnlineCasinoNews
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