There is likely to be less prosperity resulting from these money mills than was originally expected. Redistribution of waning wealth squeezed from a shrinking market will be of some assistance in supplementing purses but the reality is that what has happened is an expansion of product in a stagnant marketplace at a time when wagering in all forms is contracting within an economy that will almost certainly be in a deep and sobering recession for years to come.
The projections on which economic forecasts were made in advance of the Aqueduct project, having been calculated during the long-ago burst technology bubble and sustained through the exploded real-estate bubble are no longer valid. Nor, probably, are those sold to voters in Maryland. Alternative gaming at racetracks in no longer an enhancement to the core business but a survival mechanism. With wagering on horse races down nationwide and the gaming industry in freefall, it is a tenuous partnership upon which the racing industry has attached its hope for future prosperity.
Las Vegas Sands, $5.34 at the Tuesday close, is perhaps the most jaw-dropping example of the current morass in the casino gaming business, having traded within the last year at $122.96.
MGM-Mirage, closed at $11.36, well below its $93.19 52-week high.
Wynn Resorts, once a $139.75 stock, closed on Tuesday at $50.10.
The only gaming stock with anything to offer at the moment, Boyd Gaming, closed Tuesday at $4.48, significantly lower than it 52-week high, $39.84, but yields an 8.6% dividend.
The marriage of the ill to the crippled seems a rather flimsy business plan, but, in reality, it is exactly what the partnership of racing and mechanized gaming has become. --PM