Atlantic City's Declining Revenues

Posted: Thu, Oct. 11, 2012

Atlantic City casinos' gaming revenue off over last September

By Suzette Parmley

Inquirer Staff Writer

Atlantic City's dozen casinos posted a 6.3 percent decline in gambling revenue in September compared with a year ago. It was the first post-peak-season month since Revel opened and included two more weekend days than September 2011.

Gambling revenue was $276 million, compared with $295 million in September 2011, according to figures released Wednesday by the New Jersey Division of Gaming Enforcement.

As it has every month since its April 2 debut, Revel ranked eighth among the 12 casinos here, taking in $16.9 million. The lackluster finish all but reaffirmed what gaming analysts and industry observers have been saying: 

The $2.4 billion casino, built with more than $300 million in state aid and the strong backing of Gov. Christie, has not helped grow the Atlantic City gambling market.

Despite hopes by many that Revel would attract a higher-end clientele as a Las Vegas-style mega-casino spanning 20 acres of beachfront, it has not gained traction. In August, Revel asked lenders to increase its credit limit to $100 million to get it through the rest of the year and to help offset the lower-than-expected monthly gaming revenue.

Its slow start has been blamed on myriad issues, including high hotel prices ($210 per room) and lack of any moderately priced restaurants and buffet (found in every other casino here), as well as Revel's 100 percent no-smoking policy (other casinos allow smoking on 25 percent of their gaming floors).

"Revel took a step backward this month, as revenues declined 15.7 percent from their peak in August," said gaming analyst John Kempf, of RBC Capital Markets L.L.C. "Revel did have a low table hold at 9.1 percent, but the property only generated $12.7 million in slot revenue, a continued area of weakness."

Excluding Revel, gambling revenue in Atlantic City overall declined 12.1 percent.

Only the Golden Nugget - formerly Trump Marina, which underwent a $150 million makeover last year - reported a revenue increase. Its $11.5 million ranked it 11th among the 12 Shore casinos, but the increase was 7.7 percent over a year ago.

Borgata's revenue, $55.3 million, declined 5.9 percent year over year, primarily as a result of lower table-games revenue, which was down 19.9 percent year over year.

All four Caesars Entertainment Inc. properties - Bally's, Showboat, Caesars, and Harrah's Resort - were down, with the sharpest decline at Bally's, 22.6 percent.

Other properties reporting a decrease - Tropicana, with the biggest drop at 29 percent, and the Atlantic Club (formerly the A.C. Hilton), down 1.9 percent - suffered lower table-games hold despite the two extra weekend days.

By contrast, Pennsylvania's 11 casinos generated a bit more than $200 million in gross slots revenue last month, up 0.16 percent from a year ago. Revenue from table games will come out later this month.

http://www.philly.com/philly/business/20121011_Atlantic_City_casinos__gaming_revenue_off_over_last_September.html