International edition
September 24, 2021

Increasing competition

Atlantic City casinos' profits fell 38 % in the first quarter amid recession

(US).- Heaping on the bad news, Atlantic City's 11 gambling halls reported this week that their first-quarter gross operating profits were 38 % lower than in 2008.

T

he casinos earned us$ 151.2 million in all the first three months of 2009, compared with us$ 243.8 million in the same period last year.

Their net revenues fell 16.2 % to us$ 925.2 million for the period. The Borgata Hotel Casino & Spa led the city with gross operating profit of us$ 47 million for the quarter, but that was still 16.6 % below the first quarter of 2008.

Atlantic City is in the third year of a revenue decline that began when slots parlors started opening in the Philadelphia and New York City suburbs. Las Vegas Sands Corp. is to open the latest on Friday in Bethlehem, Pennsylvania.

"Competition has been killing Atlantic City, and it's going to get worse," said Timothy Wilmott, chief operating officer of Penn National Gaming, which considered but then scrapped two casino projects last year in Atlantic City. "The next two or three years will be very difficult for this market."

Gross operating profit represents earnings before interest, taxes, depreciation, amortization and other charges. After all of those other costs, Atlantic City's casinos reported a net loss of us$ 94.7 million, almost triple their combined net loss of us$ 32.6 million in the same period last year.

Harrah's Resort Atlantic City reported gross operating profit of us$ 32.7 million, down 15.8 %; Bally's Atlantic City earned us$ 27.2 million, down 14.3 %, and the Trump Taj Mahal Casino Resort was at us$ 20.4 million, down 18.7 %.

Caesars Atlantic City had a gross operating profit of us$ 19.7 million, down 48.8 %; the Showboat Casino Hotel was at us$ 14.2 million, down 33.4 %; and the Tropicana Casino and Resort reported a decline of 59.6 % to us$ 4.8 million.

Trump Plaza Hotel and Casino reported a gross operating loss of us$ 529,000 compared with a gross operating profit of us$ 9.6 million in the same period last year. Trump Marina Hotel Casino, which could be sold next week to a New York developer, reported a gross operating loss of us$ 858,000, compared with a gross operating profit of us$ 4.8 million last year.

Resorts Atlantic City reported a us$ 5 million gross operating loss compared with a us$ 1.4 million gross operating profit last year. Its sister property, the Atlantic City Hilton Casino Resort, reported a gross operating loss of us$ 8.4 million, compared with a gross operating profit of us$ 4.2 million in the same period last year.

The number of occupied room nights in casino hotels increased by slightly more than 6,000 to 1.16 million. But because casino hotels had approximately 2,100 more rooms than a year earlier, occupancy fell to 75.3 % in the first quarter from 86.3 % a year earlier.

The average room cost us$ 93 a night, ranging from us$ 64.31 at Resorts to us$ 131.99 at the Borgata.

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