Casino Profits Taking Nose Dive For MGM Mirage
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Casinos in Las Vegas and around the United States are seeing profits being driven to the ground. The economy has slowed to such a point, that even casinos are feeling the crunch.
Some industries are supposed to be immune to the problems of a damaged economy. The food and casino industries are two of those industries. Casinos, however, are showing that they might not be as immune as first thought.
MGM Mirage Inc. released their first quarter numbers, and if they are any indication, the casino industry could be in trouble. Profits fell thirty percent in the first quarter.
“This quarter was challenging, and it was clearly novoline sizzling hot impacted by the economy. Our job is to manage within the context to maximize profitability in what will surely be a challenging year,” said MGM Chief Executive Terry Lanni, to investors on a conference call.
Marketing is going to have to be at its best if there is going to be a turnaround for casinos. Trying to get people to spend money that they do not have will be a tough task. The goal will be to maximize profits from people who can afford to still go on vacations and gamble.
MGM employees are already feeling the effects of the decreasing profits. 400 employees have already been laid off by the company. They claim they will not be making any more cuts, but if profits continue to drop, they will be forced to lower their costs.
Earnings from the company were at $118.3 million, compared to $168.2 million from the same quarter last year.