Moody’s says new US casino closures “credit negative” for gaming sector
Moody's Investors Service, the bond credit rating business, believes temporary casino closures in the US will be "credit negative" for the gaming industry.
Back in June, Moody’s exclusively told Gaming America it expected short-term struggles for the sector but had optimism for 2021. In October, it then improved its outlook for US gaming.
But temporary closures to prevent the spread of COVID-19 in Illinois, Rhode Island, Detroit (Michigan) and Philadelphia (Pennsylvania) could be “just the tip of the iceberg,” according to Moody’s.
The bond credit rating firm believes the measures are credit negative for the industry, also suggesting operators in Michigan will be hardest hit.
Moody’s did indicate that casinos have performed “better than expected” since reopening in the summer, with regional casinos “dramatically” cutting costs and exceeding expectations with regards to demand and profitability.
However, Moody’s added: “A second extended closing could hurt casino performance over both the near and longer-term, because it will make it increasingly difficult for regional gaming issuers to bring down their already-high leverage.”
It is clear a second wave of closures is affecting US gaming and leisure establishments across several states.
In Nevada, for example, Governor Steve Sisolak has announced a three-week “statewide pause.” This will include bars and restaurants reducing operations from 50% to 25%, with prohibitions on service without advance reservations.
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