Casino Shares Hurt by Fears About Climbing Interest Rates, Wages
(Bloomberg) -- Shares of casino operators and their suppliers tumbled Friday as fears of rising interest rates, higher wages and soft consumer spending weighed on the sector.
Penn National Gaming Inc., which is completing the acquisition of Pinnacle Entertainment Inc., fell as much as 9.6 percent in New York. Slot-machine maker Scientific Games Corp., which carries $8.9 billion in debt, lost more than 11 percent, and Caesars Entertainment Corp., which reported weaker trends in Las Vegas this summer, slumped 7.1 percent.
“Gaming stocks remain under pressure as rising interest rates and higher wage pressure could negatively affect the earnings of these companies,” Chad Beynon, an analyst with Macquarie Bank Ltd. in New York, said in an email. “The deceleration of Macau September revenues, in addition to negative Vegas trends, continues to escalate questions around 2019 growth.”
Gambling revenue on the Las Vegas Strip fell 12 percent in August. Revenue in Macau, the world’s largest gambling market, rose 2.8 percent in September, but that was the slowest growth in two years.
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