Another Thursday, another Green Felt Journal in Vegas Seven. This week, I tackle casino debt with the help of Eugene Christiansen:
It’s no secret that casino companies are more debt-encumbered now than they’ve ever been. In 1990, the average big Las Vegas Strip casino (those earning more than $72 million a year in gaming revenue), had $7.8 million in long-term debt attached to it. By 1999, that number had soared to $171.5 million. And as of 2009, the total stood at $860 million. That’s a lot of borrowing.
And yet casinos continue to borrow money—last month MGM Resorts International sold nearly $500 million in bonds that it plans to use to pay loans that are coming due in 2011. And Boyd Gaming is preparing a similarly sized bond offering for much the same purpose.
It’s almost hard to wrap your head around how much debt casinos have these days. This is definitely a concern for the financial health of the industry, and therefore the state, in the future.
I’ll probably be writing more about casino debt in the coming months, though it will likely be in a more academic channel.