U.S. facing financial crunch
The US Financial crisis has had a deep impact on the economy and the continuing bad mood is a hamper for the business which generates revenue being shared by the government. The online gambling market has seen a huge downtrend in revenues and numbers as the financial crisis has raised questions on the liquidity scenario and payout capacity of financial institutions.
U.S. Economy tumbles
Most of the leading Financial institutions in U.S. have taken a beat from the ongoing crunch and the pinch is felt by big business houses including Lehmann and Merill Lynch. The Housing sector collapsed last year which has given rise to increasing number of foreclosures and the affect is well understood from the crashing property prices in the U.S. market. The property prices have tumbled more than 50 % in most states owing to the frequent sale off by banks and financial institutions for recovering their bad debts. This has further led to the credit squeeze and financial institutions are continuously raising interest rates to secure their loan arrangements. The interest factor has dampened the sentiment and so is the case being seen n the financial markets which are continuously heading downwards.
Gambling revenues affected
Online Casino Gambling industry is fast growing and U.S. records a 13.8 billion growth in revenues from 1994 to 2004. The US Gambling industry
is well connected to the tax system and Governor George Pataki, had earlier proposed to dedicate funds from lottery to finance the education initiatives. The government attracts revenues from the gambling market via horse racing gambling, lottery, Off track betting and Casinos which have funded various projects and government ventures.
With the worsening of financial system in the U.S. and the increasing fuel and food cost in the country. In April alone, Las Vegas reported $524 million loss by players which further dampens the mood of the market and has impacted negatively on the new players entering the market. Nevada state reported that gamblers lost $1 million in April and the decline is almost 5.1 percent compared to previous years. The decreasing number of volumes is clear from the losing ratio which is demoralizing players to enter the game room.
The revenues have taken a hard hit from the current scenario which is also affecting the revenues attracted by state governments from the gambling market. More than 11 casinos reported a 6.6 % fall in revenues in Atlantic City this year in July compared to previous year. Atlantic numbers have hurt the U.S. Gambling community
and Trump Entertainment reported a 4.8 percent decrease in revenue. Many casinos in Nevada are trying to understand the problem which is affecting casinos throughout the country. The financial crunch in the economy has dampened the industry and so the volumes see a negative number this year.
In This bad scenario, the bailout plan by the U.S. government has come as relief package and the same shall be helpful in stabilizing the state governments to some extent.