Local casinos vie with Vegas as gamblers pull back

By Mark McSherry - Analysis

NEW YORK (Reuters) - As travel costs continue to rise, some analysts say closer-to-home regional casinos might attract gamblers away from "destination" gaming centers like Las Vegas and Atlantic City.

They argue that the extra costs involved in traveling to those two popular cities could make some gamblers choose instead to keep their hard-earned cash for local tables and slot machines.

Others, however, believe both regional and major gambling venues will continue to suffer as the U.S. economy weakens and consumers are more careful about staying on budget.

In Las Vegas, a number of prominent gaming companies -- including MGM Mirage Inc (MGM.N: Quote, Profile, Research, Stock Buzz) and Wynn Resorts Ltd (WYNN.O: Quote, Profile, Research, Stock Buzz) -- reported deteriorating quarterly earnings in the last three weeks.

On the East Coast, Atlantic City-based Trump Entertainment Resorts Inc (TRMP.O: Quote, Profile, Research, Stock Buzz), chaired by property magnate Donald Trump, reported a wider first-quarter loss, saying revenue was hurt by increased competition from Pennsylvania and New York.

"People will go to a good alternative ... the best example right now is Pennsylvania," said Keith Foley, senior vice president at ratings agency Moody's.

"There are a lot more choices, the product is good and everybody is trying to draw from further distances. So some of these markets are really going to overlap," Foley added.

As another example, Foley cited the L'Auberge du Lac casino resort in Lake Charles, Louisiana, which had its best ever month in March according to owners Pinnacle Entertainment Inc (PNK.N: Quote, Profile, Research, Stock Buzz).