Q&A: Deadbeat gamblers as economic indicator?
LAS VEGAS (AP) — How do you know the economy is coming back? High rollers are paying their gambling debts.
All four major U.S. casino corporations bumped up their allowances for bad debt during the recession, with one company estimating that fewer than half of outstanding debts would be repaid. Now, companies have lowered their estimates to pre-recession rates.
The casino business was among the industries hardest hit by the economic downturn, and has been slower to recover. Visitor numbers are only now returning to 2007 levels in Las Vegas, and gambling revenue still has not completely bounced back. Even during fat times, most patrons were never offered the opportunity to gamble on credit, making this quirky economic indicator one of the lesser known corners of the gambling world.
A look at how the other half gambles:
—WHY DO CASINOS ALLOW HIGH-ROLLERS TO TAKE ON DEBT?
No one likes to give away money for free, but casino bosses believe they must issue credit to their best customers or risk losing their business. Rob Goldstein, president of global gaming operations for Las Vegas Sands says casino companies would be at a “significant competitive disadvantage” if they didn’t offer credit in Las Vegas, the home of high-end gambling in the U.S. On the Strip, it’s not uncommon for big spenders to place million dollar bets on a single roll of the dice. Regular players, of course, play on their own dime.
—WHY ARE GAMBLERS PAYING BACK THEIR DEBTS NOW?
Las Vegas executives say people are especially likely to skip out on their gambling losses when times are hard. While other kinds of companies can threaten to repossess high-end purchases, casinos ask gamblers to pay debts on experiences that are intangible, and, worse, ...