Moody’s: Casinos could face post-flood earnings woes
Published: June 8,2011
MISSISSIPPI RIVER REGION — Moody’s Investors Service said yesterday that small casino operators that have had to close properties along the Mississippi River due to flooding could see their earnings hurt.
The flooding could also further delay the regional market’s recovery, the credit ratings agency said.
The Mississippi River flooding led many casino operators in the area to close casinos there, but most have reopened.
Analyst John Zhao said in a statement that the flooding caused the biggest number of casino closings since Hurricane Katrina in 2005.
“Casino closures for three to six weeks will on average cut around 5 percent to 10 percent of annual revenue, and operating income will also suffer, especially for those casinos that continued to pay employees during the closures,” he said.
The Moody’s report says that small casino operators, like Legends Gaming, are the most vulnerable and bigger companies like Peninsula Gaming and Isle of Capri Casinos Inc. are more insulated. The report says Isle of Capri is helped because of its strong liquidity and because it has casinos in various locations.
Shares of Isle of Capri fell 8 cents to $8.40 in morning trading yesterday.
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