By Deena Beasley
LOS ANGELES (Reuters) - Las Vegas Strip casinos, largely immune to past U.S. recessions, may need more than luck to avoid succumbing to the latest round of economic weakness.
"It's hard to ignore a lot of the bad news that's out there. Clearly the consumer is a little bit stressed," Dan D'Arrigo, chief financial officer at casino operator MGM Mirage (MGM.N: Quote, Profile, Research, Stock Buzz), said this week at the Reuters Travel and Leisure Summit in Los Angeles.
Deutsche Bank analyst Bill Lerner said weakness is already being felt at "high-frequency" gambling venues like regional riverboats and Vegas casinos that cater to local residents.
"There are some risks on the casino side that are starting to rear their heads right now," Lerner said.
The U.S. gambling market actually grew during past recessions, most of which coincided with major increases in gambling capacity. In the early 1980s, New Jersey's Atlantic City was starting to build out, and in the early 1990s the riverboat casinos of the Midwest and U.S. Gulf Coast were opening.
The recession early in the current decade was unique because of the attacks of September 11, 2001, after which consumers made a relatively quick comeback to Vegas, Lerner said.
"This time maybe its different," he said, citing the consumer confidence crisis, strains of the war in Iraq and the fact that no new casino markets are slated to open in the near-term.
The Las Vegas gambling industry, while not immune to recession, is "recession resistant," said William Weidner, chief operating officer of casino operator Las Vegas Sands Corp (LVS.N: Quote, Profile, Research, Stock Buzz). Continued...
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