Moodys Take on Oil Spill and Casinos

The gaming industry got a boost this week when Moody’s revised the industry sector outlook from negative to stable. But USA casinos in the gulf coast are still considered risky.

Keith Foley, Moody’s senior vice president, said he has concerns about the stability of gulf coast casinos following the huge BP oil spill in Mexico’s gulf region.

“It’s pretty clear that the region is going to face some challenges,” Foley said.

The area’s tourism will surely be affected this summer, Foley said, as tourists avoid the oil-stained beaches and reduced business activity. Others agree with Foley’s analysis.

Morgan Joseph gaming analyst Justin Sebastiano visited the gulf recently and noted that while gaming officials in Mississippi and Louisiana were cautious, they were far from panicked.

“The locals were extremely concerned about their livelihoods,” Sebastiano said. “We actually were somewhat impressed with the volume of people that we saw in the casinos in all of the markets.”

Sebastiano determined that casinos in Louisiana’s Lake Charles and Baton Rouge would be less affected than, say, casino markets in New Orleans.

Sebastiano indicated he could understand why tourists might stay away from the region. While he didn’t see oil on any of the beaches, he noted the strong smell.

“Imagine melted crayons,” Sebastiano said. “That’s what it smelled like.”