Fitch: 3Q Gaming Earnings Will Reflect Soft Consumer Spending

  Fitch: 3Q Gaming Earnings Will Reflect Soft Consumer Spending

Business Wire

NEW YORK -- October 21, 2013

Gaming companies will paint a revenue picture that continues to reflect soft
consumer discretionary spending patterns during the third quarter reporting
season, according to Fitch Ratings.

Regional same-store gaming revenues were down 3.7% in July and increased less
than 1% in August, resulting in a 3% YTD same-store decline through August. An
unfavorable calendar has contributed to roughly mid- to high single-digit
revenue declines in September for states that have reported so far. Penn
National Gaming Inc. has already reported soft 3Q operating results.

We expect companies to discuss a continued focus on cost containment measures
and margin preservation as a result of the soft discretionary spending
environment during third quarter conference calls. We will be listening for
any signs of heightened promotional activity, but at this point, we believe
the competitive environment is relatively static for markets without new
supply.

Las Vegas continues to perform better than regional markets, with Strip gaming
revenues up 2.2% YTD through August on flat visitation, but performance has
also been choppy. A more favorable near-term fundamental outlook remains for
the Strip compared with regional markets, and MGM continues to publicly talk
favorably about the 2014 convention calendar.

Going forward, we are focused on rising interest rates, the Penn REIT spinoff
completion, U.S. online gaming and expansion initiatives and off-reservation
gaming. We will be expanding on these topics on our 2014 gaming Outlook
reports.

See Fitch's bimonthly Gaming, Lodging and Leisure eNewsletter, dated October
2013, which provides brief sector comments, recent and upcoming events and
summaries to rating actions and detailed reports. You'll also find links to
GLL-related reports/comments from other Fitch groups, including Leveraged
Finance, Credit Market Research, REITs, Sovereign/Public Finance and
Structured Finance.

To receive future editions of the GLL eNewsletter, complete the form at:
http://pages.fitchemail.fitchratings.com/GLLNewsletterBlankOptin/

For a broader review of revenue growth and margin expansion challenges facing
U.S. companies, see "Fitch Fundamentals Index - U.S.," dated October 2013,
available at www.fitchratings.com.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article, which may include hyperlinks to
companies and current ratings, can be accessed at www.fitchratings.com. All
opinions expressed are those of Fitch Ratings.

Applicable Criteria and Related Research:

Fitch Fundamentals Index - U.S.; Index Trend Analysis 3Q13

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=718948

Gaming, Lodging and Leisure Global eNewsletter

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=721395

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