Indiana's riverboat casinos suffer economic woes

By The Associated Press

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By Beth Boehne

Story Created: Jun 23, 2008 at 12:03 PM EST

Story Updated: Jun 23, 2008 at 12:03 PM EST

Indiana's riverboat casinos are feeling the sinking effects of an economic downturn.

During the eight months between September and April, gambling revenues at the state's 11 casinos declined for the first time in 13 years of riverboat wagering. The state's casino industry has never experienced more than two consecutive months of year-over-year declines, The Courier-Journal of Louisville, Ky., reported in a Monday story.

Revenues also declined during the first five months of this year by about $54 million, or 5 percent from the same period a year ago, according to Indiana Gaming Commission reports. Admissions also dropped during the period by nearly 7 percent.

Industry experts — and gamblers — say the weak economy, soaring gasoline prices and rampant job layoffs are pushing many to wager less or stay away from the boats.

That's the case for Nancy McIntosh, 61, of Okolona, Ky., who would frequent Caesars Indiana until losing her job nearly two years ago put the brakes on her casino visits.

"I used to go every week, but those days are over," McIntosh said. "It's so expensive."

Caesars Indiana, about 25 miles west of Louisville, posted some of the worst numbers among the state's Ohio River casinos. Gross revenues declined $12.6 million and admissions dropped by 208,000 between January and May, compared with the same period last year.

But Caesars executives cite reasons other than the economy, including fewer slot machines in operation during renovations for next month's re-branding of Caesars as a Horseshoe Casino and Hotel.

A four-day shutdown in late March because of high water on the Ohio River also cut profits.

Ed Feigenbaum, who edits a gaming newsletter in Indiana, said the overall decline in Indiana mirrors broader trends in the industry and runs counter to a belief that casinos are immune from economic cycles.

"We're finding out that isn't the case," he said.

Gambling analysts at Deutsche Bank this month also warned investors that energy prices are hurting casino profits in larger gambling destinations and regional markets such as Indiana and Iowa.

Gas prices have eaten into the cash customers can spend on leisure activities, the report said, and crude-oil prices are forcing airlines to cut low-cost flights to gaming destinations such as Las Vegas.

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