We're down 13 percent. No one could be happy with that," said Don Marrandino, president of the Harrah's Resort, Bally's, Caesars and Showboat casinos operated by Harrah's Entertainment Inc.
December's revenue fell 9.8 percent, one of the few months in 2009 that had only a single-digit decline. Slot revenue for the month declined 12.5 percent, but table game winnings were off just 4.3 percent.
Marrandino said one "silver lining" was that December's revenue was not a disaster despite a powerful storm December 19 that blanketed parts of southern New Jersey with 2 feet of snow and scared away casino customers that weekend. "It was a tough year, a hell of a tough year," he said. "But I'm encouraged. We had an encouraging December."
For all of 2009, slot winnings slumped 13.1 percent to us$ 2.7 billion, while table game winnings dropped 13.5 percent to us$ 1.2 billion. It was the third straight year of declining revenue and the first time in Atlantic City's 31-year history of casino gambling that winnings fell by double digits on an annual basis. Gaming revenue has not been this low since the us$ 3.9 billion posted in 1997.
All 11 casino hotels had lower revenue in 2009, with only Borgata Hotel Casino & Spa and Trump Taj Mahal Casino Resort managing to stay within single-digit declines. At the bottom of the industry were the Atlantic City Hilton Casino Resort and Trump Plaza Hotel and Casino, each suffering a 22.9 percent revenue drop.
Looking ahead, analysts predict there will be no recovery in 2010 because of the persistently weak economy and even fiercer competition from the Pennsylvania and Delaware slot parlors. Both states will be adding Atlantic City-style table games this year in a major expansion of their gambling industry.
"Anybody who thinks that 2010 will not be at least as challenging as 2009 is out of their mind," said Israel Posner, executive director of the Institute for Gaming Management at Richard Stockton College.
Joel H. Simkins, gaming analyst for Macquarie Securities, said Pennsylvania's table games will pull more customers away from Atlantic City and could doom some of the weaker casinos. "Now with full-fledged casinos in Pennsylvania, this will definitely add another thorn in the side of a shrinking Atlantic City market," Simkins warned in a research note to investors. "With regards to Atlantic City, we continue to believe that not all of the 11 properties will be able to survive following the passing of table games in Pennsylvania."
Linda M. Kassekert, chair of the Casino Control Commission, said Atlantic City's partial smoking ban was another factor that harmed business last year. Casino executives have long complained that customers are fleeing Atlantic City for gaming markets that do not ban smoking or have less onerous restrictions. Smoking is allowed on only 25 percent of Atlantic City's casino floors.
"The weak national economy, growing competition across our borders and the partial ban on smoking in casinos combined to depress gaming revenues," Kassekert said. But she added that the city's array of nongaming attractions, combined with the casino action, should be a strong draw once the economy finally rebounds and customers have more money to spend on entertainment.
Marrandino said Atlantic City must continue to add new retail shops, restaurants and nightclubs to give customers more to do than just gamble. He noted that Harrah's Entertainment and city officials will soon announce an expanded entertainment schedule for Boardwalk Hall, the city's main sports and concert venue.
"We had three or four shows last year. We're going to have a heck of a lot more this year," Marrandino said. "I think that will help stimulate our business for the whole city."
Analysts believe Atlantic City will limp along until the grand opening of the us$ 2 billion Revel casino in 2011. Revel is expected to be the last megaresort built here for years to come. "The sunshine peeking through the clouds is the Revel casino opening in 2011," Posner said.
Atlantic City has been on the decline since peaking at us$ 5.22 billion in revenue in 2006. Revenue slipped 5.7 percent to us$ 4.92 billion in 2007 and was down 7.6 percent to us$ 4.55 billion in 2008.