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Market Spotlight: Economic conditions weigh on gaming cos.



By MICHELLE CHAPMAN, AP
23 April 2008 @ 04:26 pm EST

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BYD 11.66 -0.1
PNK 10.13 -0.36
LVS 41.9 -0.2
WYNN 87.24 -3.13
MGM 32.03 -0.41
TRMP 1.13 0.05
PENN 31.83 0.16
ASCA 15.83 -0.23

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"MGM has capacity on its credit facility, but if it uses it for the joint venture it will inhibit their ability to buy back stock or use it for other growth initiatives," he said.

But Dennis Forst of KeyBanc Capital Markets remains optimistic on MGM due to its "strong presence in Las Vegas, new growth opportunity in Macau and a strategic shift to more management-intensive projects away from capital-intensive ones."

BMO Capital Markets analyst Jeffrey Logsdon also expects investors to seek news on Las Vegas Sands' development projects for the Cotai Strip, Singapore and Bethlehem, Pa.

Along with MGM, gaming companies with properties in Macau such as Las Vegas Sands and Wynn Resorts will be a bit more insulated from domestic economic concerns but face increased competition for the Chinese enclave's VIP customers, according to Kent.

"Macau revenue numbers have been very healthy but margin pressure from higher junket payments are squeezing margins," Logsdon added.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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