Majestic Star Casino Files Bankruptcy

(MoneyWatch)  Majestic Star Casino, a Las Vegas-based casino operator, filed for Chap. 11 bankruptcy protection this week after defaulting on $80 million in loans for its casinos and hotels in Colorado, Mississippi and Indiana. Chief executive Don Barden said the recession and competition caused the company's financial problems but it would continue operating its casinos. According to the Associated Press, at the end of June, Majestic Star owed $750 million and was worth about $405 million.

Lehman Brothers owns about $46.3 million and Goldman Sachs has $64 million in notes from Majestic Star.

Majestic Star's casinos were once well-frequented but now with gaming gaining momentum in the last decade, casinos in the middle of Colorado, Mississippi and Indiana are no longer unusual. Increased competition for the casino dollar will continue, so the only real thing that can change is the recession. I think we all know that the recession isn't letting up soon (I'm betting 2012) and credit markets will not loosen before it does. If Majestic Star can hold on for another few years it may be able to get out of debt, but if not, it's likely to go the way of the bingo parlor.