Profits plunge at AC casinos

November 19, 2008 1:16:57 PM PST
In yet another measure of how mightily Atlantic City's 11 casinos are struggling this year, gross operating profits at the gambling halls fell by nearly 23 percent in the third quarter. Figures released by the state Casino Control Commission showed that gross operating profits totaled $318 million for the quarter, compared with $412.5 million for the same period in 2007.

Gross operating profits represent earnings before interest, taxes, depreciation, amortization, and charges from affiliates, and is a widely used measure of profitability in the casino industry.

After all those expenses, the casinos reported a net loss of $78.5 million, compared to a profit of $120.8 million in the third quarter a year ago.

The Borgata Hotel Casino & Spa led the city with gross operating profits of $60.9 million, down 16.9 percent from last year. Harrah's Resort Atlantic City reported profits of $52.2 million, down 1.7 percent.

Caesars Atlantic City ($48.6 million) was down 22.3 percent; Bally's Atlantic City ($43.5 million) was down 19.2 percent, and the Trump Taj Mahal Casino Resort ($35.4 million) was down 13.6 percent.

The Showboat Hotel Casino ($24.3 million) was down 34.8 percent; the Tropicana Casino and Resort ($22.4 million) was down 42.8 percent, and Trump Plaza Hotel Casino ($16.6 million) was down 14.6 percent.

Trump Marina Hotel Casino, which is in the process of being sold, was down 35.8 percent to $7.6 million.

But the truly staggering declines were posted by a pair of casinos that have struggled more than any other this year. Resorts Atlantic City, Atlantic City's first casino which opened 30 years ago, was down 62.3 percent, to $3.3 million. Its sister property, the Atlantic City Hilton Casino Resort also had profits of $3.3 million, down a whopping 73.3 percent from last year.

Hotel occupancy increased in the third quarter this year, to 1.5 million occupied room nights, up from 1.3 million a year ago. That's due to a new hotel at the Borgata, The Water Club, as well as Harrah's new Waterfront Tower, both of which debuted this year.

For the first nine months of the year, gross operating profits at Atlantic City's casinos were down 19.5 percent to $809 million.

The casinos reported a combined net loss of $150.5 million for the first nine months of the year, compared with a profit of $170.6 for the first nine months of last year.

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