“Boom. Bust. Debris.” Seeing and recognizing a phenomenon

Yesterday’s blog generated an interesting comment: “Boom. Bust. Debris.”   The comment made want to explain that I had written about something other than the traditional capitalistic cycle.  Of course, the cycle is part of the story, but for me the discussion, the awareness of the cycle is a significant story itself.   When I write on the subject, as I have several times, I do it to help myself think about it, to help other people in the industry think about it, but also to help politicians think about it.  In that spirit, I am posting my reply to the Boom, Bust and Debris comment.  And I have included a story from the Las Vegas Review-Journal published today on the subject.  For industry insiders, observers, investors and employees it is a subject that we cannot afford to ignore.

“Of course there is the ever present boom and bust cycle of capitalism; gaming is just another illustration of the phenomenon. But as it has been the industry that has given each of us, you and I, our careers and livelihoods it feels much more personal and important to me than textiles in the 19th century or even automobiles in Detroit since the end of World War II. But my comments are more related to a general awareness of the downside, the underbelly of expansion; that is relatively new. We who live and have lived through floods and Indian gaming in Reno have long been aware of the finiteness of any customer base. Watching that knowledge spread has been very interesting for me. Today, the Las Vegas Review-Journal has an article on the subject; it is not the first on the subject nor the last.  We will all be watching, reading about and writing about that dark underside of the sparkling coin of prosperity much more in the coming years. And yes, I did steal the concept and paraphrase a book I read years ago about the underside – the world of Charles Dickens – of the of the coin of Victorian prosperity.  Doesn’t everything have a shadowed opposite, a negative?  However, we often forget it and therefore are blindsided by it.”

Barring action on a pending lawsuit, Maryland could soon have six Las Vegas-style casinos, including a $400 million gambling hall in downtown Baltimore and an $800 million resort south of Capitol Hill on the Potomac River. Pennsylvania gaming regulators are investigating six separate offers to build a $500 million to $700 million hotel-casino in downtown Philadelphia. Massachusetts authorities are weighing casino proposals for Boston and Springfield. Lawmakers in Toronto and New York City may open their markets for casino development. There isn’t an end in sight. Two gaming analysts believe there should be. In separate research reports, they said the populous Northeast and Atlantic Coast regions are close to reaching a casino saturation point. Deutsche Bank gaming analyst Andrew Zarnett told investors that revenue and cash flow from older casinos will decline as new resorts open….Moody’s Investors Service gaming analyst Keith Foley warned that gaming expansion measures that passed in Maryland and Rhode Island this month will increase the gaming supply, but not necessarily add more gamblers. Foley said casino proliferation “will only further deluge a regional market that is already saturated and forced to reach out ever farther to attract the same number of customers.”…The biggest target has been on Atlantic City. Between 2006 and 2011, gaming revenues have fallen 38 percent, from $5.3 billion to $3.3 billion, as the market fended off competition from neighboring states…Foley said more casinos will place added pressure on existing operators both in the Northeast and the U.S. gaming sector as a whole. Howard Stutz, Las Vegas Review-Journal, 11-25-12s Inside Gaming


1 Response to ““Boom. Bust. Debris.” Seeing and recognizing a phenomenon”

  1. 1 rexdstock1 November 25, 2012 at 5:56 pm

    We love our debris…  And, it’s all that debris that is killing us all.  We love our winners, even if it means we all end up losing…


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