There was a time not so long ago when “smart” investors and analysts believed that casinos were a sure bet, that gambling was recession proof, and that it was a vice people could not shake off even if money got tight. And so casino giant after casino giant started on mega projects that set to outdo each other and make glitzy Las Vegas, well, glitzier.
This recession is changing several of those plans. And despite the retirees putting their life savings into slot machines for fun in Atlantic City, casinos are taking a hit.
MGM Mirage, one of the biggest of them all, is trying to come up with funds amid a sharp downturn. The company, which is controlled by billionaire Kirk Kerkorian, is hoping to raise money to meet debt payments and also to fund CityCenter, a troubled project it jointly owns with Dubai World, in Las Vegas.
The No. 2 U.S. casino operator has hired Morgan Stanley to sell two resort-style properties - one each in Detroit and Biloxi, Mississippi. Los Angeles-based private equity firm Colony Capital is also considering an investment in the debt of the casino company.
Will Lady Luck smile again on Las Vegas? Chances are Sin City will look different again in a few years, with or without her.
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