The gambling industry is known for a little resilience during economic downturns, which might make related exchange traded funds (ETFs) seem like a decent bet. But it finally looks like some casinos in Vegas are feeling the pinch.
A survey by Rand McNally showed that two-thirds of Americans who were planning road trips this summer are either changing their plans or doing away with them altogether. That could mean fewer visitors to Vegas, which is already hurting.
MGM (MGM) and Station Casinos have cut staff, reports Brett Zongker for the International Herald Tribune. The Las Vegas Sands (LVS) lost $11.2 million in the first quarter. Analysts are expecting that the downturn will hit the mid-market Las Vegas resorts that rely on tourists driving in from Southern California.
If you do make it out to Vegas, at least you might not have to wait so long in the buffet line at the Rio now. And here’s a tip: really load up on the crab legs and shrimp. At least you try to make back what you spent in gas.
This week’s issue of Investment News featured a snapshot of the U.S. commercial casino industry last year:
- Revenues: $34.13 billion
- Taxes Paid: $5.79 billion
- Employees: 360,633
- Wages (salary, tips and benefits): $13.8 billion
- Percentage of customers who say they set a gambling budget in advance: 84%
It will be interesting to see how those numbers look at the end of 2008.
Two ETFs that seem to be commiserating with Vegas are:
