Font Size

Philadelphia Region Local News

AC Casinos Post Biggest Monthly Revenue Drop Ever

ATLANTIC CITY (AP) ―

Click to enlarge 1 of 1: CBS

Close

numSlides of totalImages

Revenue at Atlantic City's 11 casinos took a record-breaking plunge last month -- the final insult in a second straight down year in a resort that's still not used to losing streaks.

The casinos won $302 million from gamblers in December, down 18.7 percent. That shattered the previous record for the biggest monthly decline of 15.1 percent, set in September.

For the year, Atlantic City's casinos won 7.6 percent less from gamblers than they had a year ago.

It marked the second year in a row that revenues fell in a resort where they had done nothing but increase for 28 straight years since gambling was legalized here in 1978.

"These year-end numbers are the official stamp that Atlantic City had a second straight lousy year," said Joseph Weinert, senior vice president of Spectrum Gaming Group. "What tends to be overlooked in evaluating the 2008 numbers is the multiyear impact:

Over the last two years, about $600 million in gross gaming revenue has disappeared from Atlantic City."

Also gone during that period: 3,330 Atlantic City casino jobs.

"Last year was a very challenging one for Atlantic City casinos," casino commission chairwoman Linda Kassekert said. "While the economic problems that face this nation took their toll on casinos in 2008, the industry was also hurt by growing competition in neighboring states, and a partial ban on smoking in casinos."

Atlantic City's decline coincided with the opening of slots parlors in Pennsylvania and New York, which have siphoned off gamblers who previously viewed Atlantic City as their only choice without flying to Las Vegas or driving for hours to other states.

For all of 2008, Atlantic City's casinos won $4.55 billion from gamblers. Out-of-state competition continued to be felt at the slot machines, where revenues fell 9.6 percent to $3.13 billion.

Table games brought in $1.41 billion, down 3 percent.

Only one casino -- Harrah's Resort Atlantic City -- showed an increase for the year; it was up 4.9 percent.

The two biggest declines were posted by a pair of casinos owned by Colony Capital. The Atlantic City Hilton Casino Resort had the biggest annual decline at 18.3 percent. Its sister property, Resorts Atlantic City, was down 16.3 percent.

Resorts failed to make its November interest payment to lenders, and is negotiating with them in an attempt to work out a new deal.

So are the three casinos owned by Trump Entertainment Resorts, which has until Jan. 21 to restructure its debt to bond holders.

Trump Marina Hotel Casino, which is to be sold to a New York developer and former protege of Donald Trump for $270 million this spring, was down 15.8 percent for the year. Trump Plaza Hotel and casino was down 6.4 percent, and the Trump Taj Mahal Casino Resort, which opened its long-awaited second hotel tower in September, was down 5.1 percent.

The Tropicana Casino and Resort, which is to be sold at a bankruptcy court auction within the next few weeks, was down 11.6 percent for the year. It has continued to operate under a state-appointed conservator since its former owners were stripped of their casino license in Dec. 2007 following massive layoffs and problems with service and cleanliness.

Bally's Atlantic City was down 11.4 percent; the Showboat Casino Hotel was down 11.1 percent, and Caesars Atlantic City was down 6.8 percent.

Even the city's dominant casino, the Borgata Hotel Casino & Spa, was down 1.6 percent for the year.

"I don't think anybody had any sense" that 2008 would turn out as badly as it did, said Dan Nita, Caesars senior vice president. "Nobody expected what took place with the impact of sub-prime mortgages and how it cascaded. It's definitely a challenging time."

Joseph Corbo, president of the Casino Association of New Jersey, said Atlantic City may have grown spoiled by nearly three decades of gains.

"To some degree, we are victims of our own success," he said. "However, even with the declines over the past couple of years, we remain the second largest gaming jurisdiction in the United States."