AC casino profits tumble again

May 19, 2008 12:44:39 PM PDT
The bad news just keeps coming for Atlantic City's 11 casinos. The city's gambling halls reported a 17.7 percent decrease in gross operating profits for the first quarter of 2008, according to figures released Monday by the state Casino Control Commission.

Gross operating profits, which represent earnings before interest, taxes, depreciation, and other charges, is considered a better comparison between casino properties than net income or losses.

Those profits totaled $243.8 million for the first three months of this year, down from $296.2 million for the same period last year.

Net revenues fell by 4.8 percent for the first quarter, to $1.1 billion.

Eight casinos reported losses in net income for the first quarter, led by a $30 million loss at the Tropicana Casino and Resort, whose former owners lost their casino license last winter. The property is up for sale.

Resorts Atlantic City reported a $9.2 million loss, and its sister property, the Atlantic City Hilton Casino Resort, posted a $7 million loss.

The Borgata led the industry in both gross operating profits ($56.4 million), and net income ($27.8 million). But both those figures were down from the same period a year ago.

In fact, nine of the city's casinos reported declines in gross operating profits in the first quarter.

The seaside gambling halls have been hurt by new slot parlors in New York and Pennsylvania. Atlantic City's casinos suffered the first annual revenue decline last year since casino gambling began in Atlantic City in 1978, as the "win" dropped 5.7 percent, to $4.92 billion, in 2007. That figure does not represent profit.

The financial difficulties the industry is experiencing are showing up - or rather disappearing - in comps, the freebies handed out to gamblers to keep them coming back to play some more. That spending by the casinos declined by 5.6 percent in the first quarter from the same period a year ago.

Hotel occupancy ranged from a low of 72.1 percent at Caesars Atlantic City, which has had many of its rooms off the market during a renovation, to a high of 93.5 percent at the Borgata. The average Atlantic City hotel room cost $93.03 a night in the first quarter, down from $101.84 in the last quarter of 2007.