Most Vegas Casinos in Debt, BIG TIME
House always wins? While operating a Vegas casino seems like an obvious money maker, the cost of these massive buildings has most of these jackpot makers in the red long-term.
For the last few years, we’ve been reading about casino empires crumbling before our eyes. In 2012, an article ran in USA Today that the economic downturn had created huge, unpayable debts in Vegas gambling properties. These debts were incurred in brighter economic times but fell victim to the Great Recession.
One of the conglomerates mentioned in the USA Today article, Caesar’s Entertainment, was able to stall bankruptcy for three more years but finally filed for bankruptcy protection in 2015.
Donald Trump learned the hard way how ephemeral big projects can be. He took over the Taj Mahal Casino in Atlantic City and offered 14% interest on bonds to finance construction. His company defaulted on its commitments soon after. In short, a big building project may signify much smoke but little fire.
MGM Resorts International is trying to expand in both the US and Asia. Although gambling is on the rise in the US, it is not at all certain that Vegas casinos will feel the enough of said growth to forestall bankruptcy.
The Fontainebleau Resort was going to cost 2.7 billion dollars but the Bank of America pulled out in 2014 and left a shell of a building in its wake.
It isn’t just the economic downturn that has threatened so many Vegas gambling properties. Many other jurisdictions have legalized casinos in recent years. This and online casinos make it difficult for Vegas casinos to bring in the customers they need to realize the profits that will pay off their massive debts. Competition certainly reigns supreme even in the world of Vegas gambling!