There are looming dangers, too, that some other even bigger projects may face financing issues. Boyd Gaming byd, for instance, is building the Echelon and will likely need additional financing, Kwon says.
And that's a stress on a company already dealing with weakness across the board. On April 29, it reported a first-quarter loss from continuing operating of $32.6 million, down from a $35.1 million gain a year earlier. And that perhaps explains why Boyd's stock has been punished amid the downturn. The shares have lost 43% this year alone.
But Boyd is by no means the only point of pain for gambling investors. MGM on Tuesday reported 30% lower net income of $118 million. And shares of Las Vegas Sands lvs, operator of the Venetian casino, are down 27.6% this year. Higher-end casino operators, such as Wynn, have been hurt less. Wynn shares are down 4% this year.
But now, even the gambling equipment makers, which had been dodging the pain because they sell all over the world, are feeling the pinch. International Game Technology's igt shares have started to fall this year, losing 21% of their value.
Few analysts expect Las Vegas to rebound soon. Simkins expects the rest of 2008 to be difficult, as skyrocketing gas prices and the weak economy keep consumers in a bad mood. LaFleur says Vegas depends on many of the same things that the broader economy's recovery hinges on.
But Marsico remains optimistic. He hopes oil prices don't go much higher from current levels and Congress will find a way to sort out the housing mess. Plus, both Wynn wynn and Las Vegas Sands have casinos in the faster-growing Asian gaming market. "There is light at the end of the tunnel, while before, it was gloomy," he says.