AC casino revenues drop

April 10, 2008 1:02:38 PM PDT
So much for a winning streak. After a momentary foray back into the black in February, revenue from the city's 11 casinos was way back down in March.

Figures released Thursday by the state Casino Control Commission show that the gambling halls took in $395 million, down 9.9 percent from March 2007. Every casino in the city reported a decline last month.

The casinos won $277.3 million at the slot machines, down 11.2 percent, while table games revenue brought in $117.7 million, down 6.6 percent.

Blame the usual suspects: Slots parlors in Pennsylvania and New York, the lingering effects from smoking restrictions Atlantic City imposed a year ago, and a worsening national economy that has made people less willing to part with their cash, casino executives said.

"It's getting to be the same old story line in Atlantic City," said Tony Rodio, president of the Atlantic City Hilton Casino Resort and Resorts Atlantic City. "It's still a very difficult operating environment. We're continuing to see the impact of the poor economy and high gas prices in addition to regional competition."

Mark Juliano, chief executive officer of Trump Entertainment Resorts, which operates three casinos here, noted that Easter weekend, traditionally a slow period for casinos, fell in March this year as opposed to April last year. And March 2007 was the lone month of that year in which revenues were up, making for a worse point of comparison with this March.

But despite that, Juliano said he expects short-term improvement in Atlantic City.

"I do think the worst is behind us," he said.

The Tropicana Casino and Resort, struggling to recover from a difficult year in which its former owners lost their casino license and customers abandoned the place in droves, had the worst month in March with a 20.1 percent decline. The casino is for sale, and new owners could sign a deal to purchase it by the end of the month.

But even the Borgata Hotel Casino and Spa, which regularly dominates in revenue, saw its take decrease by 13.4 percent. Bally's Atlantic City fared even worse, down 13.5 percent.

Other big losers were Resorts (13.3 percent); the Showboat Casino Hotel (12.2 percent), and Caesars Atlantic City (9.2 percent).

The Hilton was down 8 percent; Trump Marina Hotel Casino was down 6.3 percent, Trump Taj Mahal Casino Resort fell 4.1 percent, Trump Plaza Hotel and Casino declined 2.2 percent, and Harrah's Atlantic City was down 0.7 percent.

February's success - a 1.5 percent increase from a year ago - was actually due more to a calendar fluke than anything else. February had an extra day this year, thanks to leap year, and it happened to fall on a Friday, which is always a busy day for casinos.

Some casino executives and industry analysts expect Atlantic City's slump to continue at least through the third quarter of this year.

In a report issued this week titled "Why This Downturn Could Be Different," Goldman Sachs said the current slowdown for casinos nationwide could be worse than it has been in the past. This is because there is now more legalized gambling than ever before in the United States (12 states now offer commercial gambling, compared with only two - New Jersey and Las Vegas - in 1980).

The number of slot machines has increased fivefold in the country since 1991. A gambler in New York who wanted to drive to a casino used to have only one option: Atlantic City. But that person can now take a relatively short drive to Pennsylvania, Connecticut, or even closer to home at Yonkers Raceway to play the slots.