Casino Operators On The Brink Of Bankruptcy

By Ben Hamill - April 10 2020

Casino Operators On The Brink Of Bankruptcy

US casino operators are on their last reserves, reveals a recent report compiled by Macquarie Research. Most companies have, at best, 14.3 months remaining before running completely out of cash and available credit resources. Some have as little as 5.2 months left before the taps run completely dry. Applying for bankruptcy protection may ultimately be a call that many operators will have to make.

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Penn National Gaming is one of the unlucky few to have only a little over 5 months remaining in terms of a possible recovery time. The operator is apparently flying through some $6.4 million in cash resources every day. A giant like MGM Resorts may survive for only a little while longer – burning through $14.4 million each day means that the casino group has 9 months’ worth of resources remaining before the cash cow dies.

Experts Agree With Projections

The Reverend Richard McGowan, who is a finance professor in tenure at Boston College, and who has a keen interest in the global gaming industry, has confirmed that the projections contained in the Macquarie Research report are in all likelihood completely on the money.

McGowan referred to the casino industry as a sector already under immense financial pressure as it is. There simply are no soft cushions of safety to fall back on. The industry is a bit like someone with an immune system already compromised by some pre-existing condition, said McGowan. A global pandemic is tantamount to the straw that breaks the camel’s back.

Never Been Quite This Bad

Federal aid is the only remaining saving grace right now, said McGowan. Bankruptcy protection orders could become a stark reality real soon. The only two operators who remain free from the possibility of going under right now, are Las Vegas Sands and Wynn Resorts.

Gaming industry historian David G. Schwartz, gaming historian, industry expert, and academic administrator at the University of Las Vegas, is of the firm conviction that the pandemic is the biggest de-stabiliser that the industry has witnessed to date. Schwartz said that he sees the pandemic as being the most serious threat to the Las Vegas economy in history. And the next step, said Schwartz, is a complete economic peril.

The Las Vegas economy is dependent on many other support economies also affected by the pandemic. Even once the current shutdown orders have been revoked, it will take some time for business to return to normal. And time is a commodity not exactly freely available right now.