NEW YORK (Associated Press) - Shares of MTR Gaming Group Inc. dropped sharply Monday after Standard & Poor's Ratings Services expressed concern that the casino operator may violate its financial covenants in the near future.

On Friday, S&P cut MTR's non-investment grade corporate credit rating to "B-" from "B+." The rating outlook is negative, which means that another downgrade is possible.

MTR shares dropped 26 cents, or 6.2 percent, to $3.91 Monday. The stock has traded between $3.59 and $10.47 during the past 52 weeks.

"The ratings downgrade reflects our concern that the company will violate the financial covenants established in its credit agreement in the near term, despite having previously amended its covenants in March 2008," said S&P credit analyst Mike Listner in a statement.

S&P estimated that MTR would have to increase its earnings before interest, taxes, depreciation and amortization by 60 percent in the second half of the year to prevent a covenant violation.

S&P noted that MTR has increased its revenue and EBITDA in the first half of the year, but said second-half EBITDA growth is not likely to be sufficient. The ratings service noted that MTR's Mountaineer Casino, Racetrack & Resort in Chester, W.Va. has been booking declines in slot revenue due to the weak economy and increased competition in southwestern Pennsylvania.

"We view (MTR's) situation similarly to that of other casino companies, with weakening core business and significant capital needs," said Oppenheimer & Co. analyst David Katz in a note to investors.

MTR representatives were not immediately available for comment.