The addition of eight new casinos planned to open over the next three years in the US Northeast corridor will increase competition among operators in an already saturated market, but will benefit gaming equipment vendors, says Moody’s Investors Service.
There will be difficulties for new casinos to gain share in these oversaturated markets as existing operators have been cutting costs and paying down debt in anticipation of the new entrants. The new casinos will hit Atlantic City particularly hard, where increasing competition from casinos in Pennsylvania, Maryland, Delaware and New York has led to the closure of four casinos in 2014.
Gaming equipment manufacturers will clearly benefit from the new supply. “The new casinos will be ordering some 20,000 new slot machines, boosting revenues for manufacturers that have been hit by slowing gaming revenue as existing casinos delay replacing older machines,” said Peter Trombetta, a Moody’s Analyst. “The biggest suppliers will likely benefit the most.”
These include International Game Technology, Aristocrat Leisure Ltd and Scientific Games Corporation among others.
The eight new casinos should open by 2018.