SunTrust Robinson Humphrey Gaming analyst Patrick Scholes told investors in a research note Tuesday that Tropical Storm Harvey would cause Louisiana casinos “to feel ongoing weakness due to poor visitation.”
He said Lake Charles and Shreveport are in the direct path of the storm.
Lake Charles – home to Pinnacle Entertainment’s L’Auberge property and Tilman Fertitta’s Golden Nugget – is a two-hour drive from storm-ravaged Houston, its largest feeder market.
“We would expect casino spend to decline as the Houston area recovers,” Scholes said. “We see the near-term impact as worse than it otherwise would be due to the upcoming holiday weekend.”
Scholes said Louisiana Gaming Control Board statistics show that 84 percent of L’Auberge Lake Charles customer base comes from 150 miles outside of the area.
“Vinton (home of Boyd Gaming Corp.’ Delta Downs Racetrack, Hotel & Casino) and Lake Charles figure to source more from Houston and East Texas than other Louisiana markets,” Scholes said.
He said Baton Rouge and New Orleans are not in the direct path of the storm, according to forecasts.
Scholes said there was a “silver lining” for Louisiana’s gaming markets.
“In the medium term, we believe there can be a whiplash effect. Construction jobs and FEMA money can benefit local casinos,” Scholes added.
