Will cost cutting save the day for the off-line casino industry?
Wednesday 21st January 2009
As more and more worldwide off-line casino companies continue to struggle we have seen some significant reductions in workforce counts and base costs. While some of these cost-cutting excises have the potential to deliver substantial savings there is a concern that too many companies are already overextended and unable to withdraw from many ongoing liabilities and projects. So what next?
Leaders in the off-line casino industry are hoping and praying that the US recession will soon end and confidence will again be injected into areas such as the Far East. We have already seen a number of US companies withdraw their services from Macau in relation to ongoing projects and future casino ventures. The potential to bring back billions of dollars in house to assist with the short-term requirements of the casino industry appears too much for many to refuse.
However, a quick look at the share prices of the leading casino groups in America will see that many have been reduced to junk status such is the lack of support and concerns for the industry. Unable to fund their future obligations, unable to raise money from shareholders and under increasing pressure from US banks it would appear that cost-cutting exercises and asset sales are the only way forward.
As more and more worldwide off-line casino companies continue to struggle we have seen some significant reductions in workforce counts and base costs. While some of these cost-cutting excises have the potential to deliver substantial savings there is a concern that too many companies are already overextended and unable to withdraw from many ongoing liabilities and projects. So what next?