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Gaming industry layoffs affect 13,100

Dec 9, 2008 5:10 PM
by Ray Poirier | Nearly every major gaming company has laid off workers in the current economic slump and so far the end isn’t in sight, nor is the impact on the various communities.

"These (gaming) complexes employ thousands and thousands of workers," said American Gaming Association President and CEO Frank J. Fahrenkopf. "And those thousands of workers buy cars, buy washing machines. So it’s a major negative impact on the communities where we do business when we have to cut back."

During November, according to the U.S. Department of Labor, some 13,100 industry workers lost their jobs.

Among the big names was the Borgata Hotel Casino and Spa in Atlantic City, which reduced its payroll by 400 workers. But that property was hardly the only major casino to cut workers. The slowdown has had a major impact on all Atlantic City casinos.

In Nevada, Randy Black announced just last week that he was closing the casino and restaurants in his Oasis Hotel/Casino in Mesquite. Some 500 employees will be affected, he said.

The gaming industry is expected to be particularly hard hit during the fourth quarter as consumers tighten their belts and restrict their travel and entertainment spending.

Gaming analysts continue to downgrade the ratings and earnings estimates of major companies. On Monday, prior to the opening of trading markets, Christina Woo, Soleil Securities Group analyst, lowered her rating on Boyd Gaming Corp. (BYD) from "buy" to "hold."

Last week, Citigroup analyst Ankil Daswani, who initiated coverage of the Wynn Resorts Ltd. (WYNN) shares, issued a "sell" rating and a price target of $29. He said he does not see any catalysts for the stock until the second half of 2009.

And bond analyst Andrew Zarnett of Deutsche Bank recently advised clients that the "sharp downtown in consumer spending has taken its toll on Las Vegas operators…We believe market conditions will worsen for some time to come as credit standards continue to tighten and consumers deleverage by need or want."

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