Mideast turmoil could hurt Las Vegas gaming

Gaming analysts are watching the unfolding political upheaval in the Middle East with some trepidation.

A spike in oil prices due to the unrest in Egypt, Libya and other countries might increase the cost of fuel and gasoline in the United States.

The casino industry's already tenuous recovery could be halted.

Independent gaming analyst Jonathan Galaviz, who specializes in foreign tourism markets, predicts oil prices per barrel will increase more than 6 percent in the next two weeks.

This is not good news for the airlines that are slowly adding capacity into McCarran International Airport.

Janney Montgomery Scott gaming analyst Brian McGill said the number of passenger seats into Las Vegas is expected to climb 2 percent by the end of June.

Rising fuel costs might diminish those flights.

"If oil continues to move higher, capacity could actually be reduced and this creates risk to the Strip recovery," McGill said.

Higher gasoline prices could also keep drive-in visitors from Southern California and Arizona away from Las Vegas.

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An Illinois appellate court's decision last month to halt expansion to the state's slot machine market is no longer viewed as a death blow to Nevada's gaming equipment manufacturers.

One casino development project in Atlantic City has been given new life. Other regional casino projects are on the construction calendar.

Slot machine production lines could restart this year.

Credit Suisse gaming analyst Joel Simkins said casino managers are optimistic they will be buying new slot machines by 2012.

"Our industry sales contacts continue to indicate that operators, mainly regional and Native American, are identifying capital earlier in 2011 and are starting to turn these funds loose into orders," Simkins said.

The on-again, off-again Revel in Atlantic City has been given a governor's stay of execution. New Jersey helped secure financing and Revel could open in 2012.

Isle of Capri Casinos is expected to open a new casino in Cape Girardeau, Mo., by the end of the year. Pinnacle Entertainment's Baton Rouge, La., hotel-casino is slated for early 2012.

Temporary casinos in Cleveland and Anne Arundel, Md., are also on the books. Dan Lee's Mojito Pointe project in Lake Charles, La., is at least two years off.

Simkins said WMS Industries, Bally Technologies and International Game Technology stand to benefit.

After slot machine shipments fell 15 percent in the last three months of 2010, any uptick is positive.

Howard Stutz's Inside Gaming column appears Sundays. He can be reached at hstutz@reviewjournal.com or 702-477-3871. He blogs at lvrj.com/blogs/stutz.