Casino industry shrugs off credit crunch threat

By Ian Mylchreest

LAS VEGAS, Nov 13 (Reuters) - Casinos have little to fear from the credit crunch sparked this summer by the subprime mortgage crisis, according to finance professionals who addressed the issue at the Global Gaming Expo on Tuesday.

Steve Croxton, co-head of gaming and leisure investment banking and managing director at Jefferies and Co, set the tone by saying the credit downturn was "not terrible compared to previous cycles."

Besides, MGM Mirage (MGM.N: Quote, Profile, Research, Stock Buzz) Chief Financial Officer Daniel D'Arrigo said his company had effectively become a real estate company with large holdings on the Las Vegas Strip, and would use its assets to fund development. Wynn Resorts Ltd (WYNN.O: Quote, Profile, Research, Stock Buzz), Las Vegas Sands Corp (LVS.N: Quote, Profile, Research, Stock Buzz) and Harrah's Entertainment Inc HET.N were following the same pattern, he said.

The falling dollar was also creating financial opportunities that would offset the credit crunch impact.

"With the dollar down, America is on sale," D'Arrigo said. "We get offers every day from overseas seeking to be joint venture partners."

Australia's Crown-PBL PBL.AX and developers Kerzner International and Elad were part of that investment wave, said Carlton Geer, global gaming group head at CB Richard Ellis.

The land boom, which has seen parcels on the Strip selling for as much as $37 million an acre, has insulated Las Vegas properties from any financing difficulties, he said.

"In fact," Geer added, "the MGMs of the gaming industry may have a competitive advantage because of their balance sheets and their existing relationships."