US states look to casinos for revenue as economy sags

Voters are set to decide next month on gambling referendums in Colorado, Maryland, Missouri and Ohio that range from ending loss limits to opening new territories for casinos.

"The November ballot initiatives probably have a better chance than ever of passing, simply because of high voter turnout," said Nicholas Danna, equity analyst at Sterne Agee, referring to the US presidential contest. "Also, in tougher times gaming either gets approved or gets expanded," he said.

Analysts said the biggest beneficiary of this year’s initiatives would be Ameristar Casinos Inc, which operates two casinos in Missouri and the largest casino in Colorado. "On the other hand, Penn National Gaming has the most to lose if gaming is legalized in Maryland and Ohio, as its two most profitable casinos are across the border from those states," Keybanc analyst Dennis Forst said in a research note.

Shares of casino companies have plummeted, with the Dow Jones US Gambling Index .DJUSCA now trading 75 % lower than its lifetime high of 895 set a year ago.

Shares of Las Vegas-based casino operators MGM Mirage and Las Vegas Sands Corp have fallen 86 % and 91 % respectively, over the same period.