'The Eater or the Eatee'
|America's biggest gaming companies are headed for a showdown and shakeout, say close observers of the industry.|
| A national backlash has arisen
in the last two years against efforts to usher in new
markets across the country, and the result will be
serious consolidation until only five or six major
players will be left, say Wall Street analysts.
Five years ago, with the rush to legalize riverboat casinos in the Midwest, companies expected an entirely different scenario.
"What the companies thought before was that we'll have gaming in 50% of the states," says Michael French, a Coopers & Lybrand gambling consultant.
"We had development teams all over the country. Well, that hasn't happened."
Steve Wynn's Mirage spent $15 million in Connecticut, pursuing the rights to operate a casino in Bridgeport, which would have been even closer to New York City than is Atlantic City. But the effort collapsed, caught in local political wars. Wynn, weary from the fight, said he would stop lobbying states for new business.
The possibility of partnerships with Native American tribes has also diminished. Most tribes with a burning desire to launch casinos have already done so. And new tribal initiatives have been hit by a recent U.S. Supreme Court decision, which eliminated the right of tribes to sue states in federal court when unable to negotiate a state compact for gaming.
So big companies in the industry have decided that it's either get aggressive about growth or lose out entirely.
"Five or six companies in gaming
are going to determine the future of the
industry," says Glenn Schaeffer, president and chief
executive of Las Vegas-based Circus Circus Enterprises.
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