According to a recent report from corporate financial research firm Moody's Investors Service, the slowing US economy is increasing the potential for negative rating actions in the American gaming sector as the negative impacts to casino gaming revenues begin to take their toll.

The group stated that negative rating actions for the American gaming sector are expected to significantly exceed the positive this year with eleven US gaming issuers currently on review for possible rating downgrades with six having a negative outlook. It said that, combined, these issuers account for almost one-quarter of the total number of rated American gaming issuers.

Moody's said that the declining disposable income of potential customers along with increasing travel costs are lowering overall visitor numbers and spend per visit in many gaming markets.

“Further, many markets are relatively new with little-documented history to indicate how they will perform during a period of prolonged economic weakness,” read the report from Moody's.

It stated that this slowdown along with the possibility of a recession sit alongside fierce competition among gaming jurisdictions requiring firms to spend on promotion and investment. Many issuers are also finding it hard to gain access to capital capital markets, which increases the overall risks to the sector's credit profile.

“Decreased access to capital is also likely to result in the cancellation or delay of development projects, which could hurt longer-term revenue and cash flow growth rates,” read the release from Moody’s.


Source: iGamingBusiness.com