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| Opportunities & Exposures |
High Rollers
Caroline Waxler
08/02/2004
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States are not
altogether in the business of stacking the deck for investors, however. State
governments have become so intoxicated with all this potential revenue flooding
their coffers that taxes on gambling have risen inordinately. For example, New
Jersey Governor James E. McGreevey has proposed increasing the state’s 8 percent
casino tax rate to 10 percent. This has rankled both the casino owners and
their investors. In the wake of the proposal, companies owning Atlantic City
casinos lost $700 million in market value in two days. Companies that were
considering development plans in Atlantic City pulled their chips off the table.
MGM Mirage, which was planning to build a new casino, and Park Place
Entertainment, which envisioned a parking garage and hotel tower, have held
off.
Even if states put the squeeze on casino gaming, we need only look south
for another promising prospect. Mexican legislators may soon make casino
gambling legal. President Vicente Fox recently voiced his support for gaming.
This could launch a $3 billion-a-year industry, experts estimate. Mexican casino
licenses could be good investment bets—if and when they become available.Caroline Waxler is the author of Stocking Up on Sin: How to Crash the Market with Vice-Based Investing.
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