The news helps explain the spate of recent efforts launched by Strip resort owners to increase liquidity and reduce costs. In January, Harrah's Entertainment delayed the opening of its new tower at Caesars and MGM Mirage delayed and cut 21 floors of condominiums from its now 25-story Harmon Hotel, one of several towers that are part of its 18 million-square-foot Citycenter development. Also that month, seeking more liquidity, MGM Mirage agreed to sell its Treasure Island resort to billionaire Phil Ruffin for $775 million, and Wynn Resorts bought back $625 million of its own debt at a discount after capitalizing on its addition to the S&P 500 by selling 8 million shares of common stock in December.

In November, Las Vegas Sands Corp. halted construction on high-rise condo tower in front of its new Palazzo resort and offered up 181.8 million common shares to raise $2.14 billion in new capital and avoid defaulting on its credit agreements. Boyd Gaming was the first to react to the softening market, halting construction of its multi-billion-dollar Echelon integrated casino resort development on the Strip in July. The 87-acre was scheduled to open in late 2010 with 5,000 rooms in five hotels, 750,000 square feet of convention and meeting space, 300,000 square feet of retail, two live entertainment venues, 30 dining and nightlife venues, a 140,000-square-foot casino and parking for 8,000 cars.

The 23% dip in Strip gaming win in December follows a 15% year-over-year decline in November. Downtown Las Vegas, which experienced just a 1.6% decline that month, posted a 17.5% decline in December. Clark County, which includes both of those markets as well as North Las Vegas, Laughlin and the Boulder Strip, experienced an 18.4% decline in gaming win in December, up from a 15.2% decline in November.

For the fiscal year so far (July 1, 2008 through Dec. 31, 2008), Strip gaming win is off 15.8%, Downtown gaming win is off 12.44% and Clark county as a whole is off 14.55%. The state Gaming Control Board last month issued its report on the previous fiscal year (July 1, 2007-June 30, 2008), during which the casino industry's net income tumbled 68% statewide, 57% on the Las Vegas Strip and 54% Downtown.

Last week, the ownership of Station Casinos proposed a pre-packaged bankruptcy in collaboration with lenders. Company management (the Fertitta family) and Colony Capital took the company private in 2007 and the partnership is now struggling to pay down billions of dollars of debt associated with its buy out of the formerly public company.

An owner of 18 casinos including Red Rock and the new Aliante Station, two off-Strip casino-resorts in Las Vegas, Station has offered to pay investors 10 cents to 50 cents on the dollar in secured notes and cash in exchange for some $2.3 billion of existing bonds. Affiliates of the Fertitta family and Colony Capital have agreed to put up as much as $244 million in new capital to maintain their current interests in the company.

Instant Insights /

Strip Casinos' December Win Falls 23%

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