Will Casino Players Leave The Market If The World Economy Slides?

08.29.2007 | 6:29 pm | News, casinos, gambling

While there have been a couple of casino projects which have been put on the back burner after the recent money market turmoil, it seems as though the worldwide thirst for more and more casinos, more and more web sites and more gambling arenas continues unabated.  Is the casino industry really recession proof, or will it suffer at some point?

This is a question which has puzzled many for years and it will always attracting differing views and opinions.  While the shrinking of the worldwide economy will obvious restrict the overall size of any market, the casino industry has been fairly resilient.  New markets in areas such as the Far East - with Singapore due to open its first casino complex - and the emergence of Macau as a real king pin of the industry offers new and exciting challenges to the major players.  Many government around the world are seeing the massive investment and income from the industry, and many have decided that they want their share.

So long as there is a logical argument for investing in a certain area, and the money markets calm down, there is no reason why the investment growth of the last few years should not continue.  The only real threat to the industry is over crowding, and changes in regulation (as seen in the US online market), which are often unforeseen and sudden.

Despite the troubles of the US stock market of late, it is interesting to see that many of the major casino companies are within touching distance of their all time share price highs.  This at a time when many industries around them are fearing the worst and showing signs of a slowdown. 

It also appears that changes in US gambling laws may not be too far away, boosting the online industry again and allowing entry back into the US market.  Recession proof? Not quite, but the sector does have defensive qualities.