Atlantic City casino revenue up 4.4% so far in 2016
Posted in: In The News on Friday, May 13, 2016
The city's casino industry continued to grow moderately through the first four months of 2016, generating 4.4 percent more gambling revenue than during the same stretch last year, state regulators reported Thursday. The eight casino operators and their online affiliates produced $812.8 million in gambling revenue through April. Growth was buoyed by large year-over-year gains in online gambling revenue, which rose 29.3 percent to $61.8 million. Brick-and-mortar gambling revenue rose 2.7 percent, to $750.9 million. The $812 million is seven percent less revenue than the industry generated through the first four months of 2014 and 35.6 percent less than the same period in 2009, when there were 11 casinos here. The proliferation of casinos in the Northeast, particularly in Pennsylvania, desiccated the city's pool of "convenience gamblers" - East Coast daytrippers who came to the city in droves. That revenue is likely gone for good; those gamblers now have easy access to casinos in their home states. The city's casino industry has seen gambling revenue halve from its $5.2 billion peak in 2006. But the eight remaining halls are benefiting from a less-crowded market. Operating profits are trending upward - every city casino posted an operating profit last year - and operating profit margins are rising too. A Press analysis showed that the eight casinos averaged a 17.2 percent operating margin in 2015, up from 11.6 percent in 2011. “Stabilization” has been the watchword used by regulators and analysts to describe the state of the third-largest non-tribal casino market in the U.S., though it would not be overly-optimistic to say a mild recovery is afoot here. Business is brisk at many of the properties, which spent tens of millions of dollars on renovations in recent years. Borgata Hotel Casino & Spa, the city's lodestar, did $216 million in operating profit last year on more than $1 billion in gambling, hotel, dining and entertainment revenue. This year, through April, that casino produced $237.4 million in gambling revenue, up $10.2 million, or 4.5 percent, from the first four months of 2015. Other gainers were Tropicana Atlantic City, which did $102.4 million, up $8.4 million, or 9 percent. Bally's did $66.5 million, up $4.3 million, or 6.9 percent. Golden Nugget Atlantic City did $77.8 million, up $6.6 million, or 9.3 percent. Resorts Casino Hotel did $50.7 million, up $5.7 million, or 12.7 percent. Three casinos reported year-over-year declines through April. Harrah's Resort did $114.7 million, down $5.1 million, or 4.3 percent. Caesars Atlantic City did $89.5 million, down $4.5 million, or 4.3 percent. Trump Taj Mahal Casino Resort did $52.7 million, down $1.8 million, or 3.4 percent. Caesars and Resorts operate Internet gambling through affiliates. Online revenue generated by those affiliates is not included in the totals above.
Atlantic City casino winnings up 8%
Posted in: In The News on Thursday, May 12, 2016
Atlantic City's casinos are providing more proof that their improving fortunes after a rash of competitors shut down may not be a fluke. The city's eight surviving casinos saw their collective revenue increase by 8.1 percent to $215 million in April compared with April 2015. The comparison benefited from two more weekend days this April than last. But Matt Levinson, chairman of the New Jersey Casino Control Commission said the numbers prove the casinos are turning the corner after four of their competitors shut down in 2014. "Part of the increase was the result of a favorable calendar, but part of it is also the result of casinos doing a better job of attracting new customers in a challenging business environment," he said, calling the overall results "very heartening." Atlantic City is on the verge of going broke as a financial crisis brought on by the decade-long contraction of its casino industry dried up millions of dollars on which the city's budget had depended. Lawmakers in Trenton continued to struggle to agree on an aid package for Atlantic City, but no deal had been reached as of Thursday afternoon. A sustained improvement by the casinos could help lessen the amount of aid the city needs from the state. But that improvement is not guaranteed: New jersey voters will decide in November whether to authorize two new casinos in the northern part of the state just outside New York City. In-state competition is expected to further damage the Atlantic City market and could lead to the closures of more casinos there. The Atlantic Club, the Showboat, Revel and Trump Plaza went out of business in 2014, leaving less competition in Atlantic City for the eight survivors. They are signs they are stabilizing if not improving their performance as they try to adapt to what many of them call a "right-sized" market. Resorts posted the biggest monthly increase, up 14 percent to $13.8 million. At just under $20 million, the Golden Nugget was up 13.3 percent from a year ago, and Bally's was up 12.2 percent to $18.1 million. Caesars was up 9.7 percent to $24.7 million; Tropicana was up 9.5 percent to $27.6 million; and the Borgata was up 4.2 percent to just under $60 million, by far the largest win in the city. The Trump Taj Mahal was down 4 percent to $14.9 million, and Harrah's was down 1.1 percent to $29 million. Internet gambling had another good month, taking in $16.9 million for an increase of nearly 34 percent over last April.
Statement from the Casino Association of New Jersey
Posted in: Press Releases on Friday, April 29, 2016
(April 29, 2016 – Atlantic City) As the Association that represents the casinos and its over 20,000 employees, we think it is imperative that the State Assembly act immediately and enact a legislative package (whatever format that may be) to avoid material negative consequences for the casinos, our employees, the Atlantic City community and communities throughout the state who no doubt will feel the effects if the state fails to act. We understand that the two different pieces of legislation proposed by the Senate President and Assembly Speaker are each intended to provide immediate funding for the City and address changes required in City spending. Either of these packages will move this along and prevent material negative consequences to many stakeholders. We are all now on the edge of the abyss and this impasse must end. For every parties’ sake, we urge immediate legislative action so the political process can determine which bill to implement. More specifically, we are urging Assembly Speaker Prieto to post his Bill. If there is not support in the Assembly for Speaker Prieto’s Bill, then we urge the Speaker to post the Senate Bill for a vote immediately thereafter. This ongoing saga must come to an end to stop the negative economic impact that has already been felt in South Jersey and avoid what will be real economic consequences for businesses and residents throughout the State. ###
Harrah’s new conference center showing high demand
Posted in: In The News on Friday, April 15, 2016
Atlantic City's newest conference center is only six months old, but it's already gaining traction in terms of future meetings booked and attendees expected — filling a void in the Shore town's market. Caesars Entertainment's $125.8 million Harrah's Waterfront Conference Center, when it opened, added about 100,000 square feet of new space. Harrah’s Atlantic City Waterfront Conference Center Caesars Entertainment The conference center opened a year after a number of hotel rooms and meeting spaces left the market with the closure of four of the city’s 12 casinos last year, including the Revel and Showboat properties — leaving a wide gap in the Atlantic City market. Since opening, Harrah's conference center has nearly doubled its booked meetings and conventions through 2019. When the center opened last year, there were 141 total confirmed bookings, according to data given to the Business Journal. Six months later — as of March 22 — bookings are now up to 258. Officials expect to bring 300,000 attendees to Atlantic City as a result. Total room nights booked has already clock in at nearly 200,000, up from the 140,000 figure in September last year, according to Caesars. "The Waterfront Conference Center, in the past 6 months, has shown it can breathe new life into Atlantic City by growing non-gaming revenue and has highlighted the city as a premier destination for meetings and conventions," said Michael Massari, Caesars' senior vice president of national meetings and events. "The facility's large space, flexibility and functionality make this all possible," he said. Atlantic City has about 15,630 hotel rooms and more than 770,000 square feet of citywide meeting space, ranging from the 600,000-square-foot Convention Center to smaller event facilities. Atlantic City is now seeing interest from organizations that typically book in other convention cities like Orlando, Fla., and Las Vegas, Nev., according to Jim Wood, president and CEO of Meet AC.
A.C. casinos' 2015 operating profits jump 40 percent
Posted in: In The News on Friday, April 08, 2016
Every city casino turned an operating profit in 2015, according to figures released Thursday by state regulators. And collectively, the eight casinos saw operating profit increase 40 percent last year, the state Division of Gaming Enforcement said. The eight gambling halls reported $547 million in gross operating profit in 2015, up from $390 million in 2014. “To me, that’s an indication that the market is stabilizing after several years of turmoil,” said Casino Control Commission Chairman Matthew Levinson. Gross operating profit is a key measure of casino performance that takes into account many of the short-term costs of casino operation — paying for supplies and employees, for example — but excludes some larger expenses, such as taxes. The city’s heavyweights posted impressive 2015 profits, including Borgata Casino Hotel & Spa, which reported $216 million in gross operating profit — up 36 percent and within striking distance of a quarter-billion-dollar year. Four Atlantic City casinos closed in 2014. Revenue from orphaned gamblers was absorbed by the remaining eight operators. Joe Lupo, Borgata’s senior vice president of operations, succinctly described Thursday what was arguably the central narrative of the industry here last year: “Less supply in the market meant more demand for each property.” In 2014 Resorts Casino Hotel, managed by minority owner Mohegan Sun, posted $2.5 million in gross operating profit — its first annual profit since 2008. Last year, the figure was up more than fivefold, to $15.6 million, at the city’s smallest casino. “Mohegan’s doing a very good job of managing that property,” said Colin Mansfield, a casino analyst at Fitch Ratings. Gambling revenue increased 3.1 percent, to $2.5 billion, in 2015 among the city’s eight extant operators. And a larger chunk of revenue is dropping down to the bottom line, Mansfield said. “More broadly speaking, this has sort of been a trend over the last couple years,” he said. “A lot of operators are going back and looking at their business and looking at where they can create some efficiencies and where they can take some cost out of a business.” Speaking from the casino floor Thursday, Resorts CEO Mark Giannantonio, insisted, as he often does, on giving a shout out to the property’s workers for the strong numbers. “It starts and ends with the service of our employees, and I just couldn’t be prouder,” he said. “We may not be the biggest, but we are certainly a force to be reckoned with here in Atlantic City. We have the product, we have the service.” In addition to the gain in gambling revenue among extant operators, room revenue was up 0.8 percent. So were food and beverage sales. But entertainment and miscellaneous revenue, which includes revenue from shows and spas, was down 1.2 percent. And revenue generated from third-party companies that lease space within the casino hotels for operations of all sorts — nightclubs, restaurants, retail outfits — fell 2.7 percent at current operators. The market snapshot released Thursday was tempered further by what state regulators have termed “industry total” numbers. In contrast with the “current operators” figures, the “industry total” breakdown compares the eight-casino 2015 Atlantic City market with the actual 2014 market numbers, which include revenue from the four casinos that closed that year. Casino revenue, on an “industry total” basis, declined 6.5 percent in 2015, room revenue was down 14.1 percent, food and beverage sales dropped 9.1 percent, and entertainment and miscellaneous revenue slid 15.9 percent. Third-party sales were down 23.8 percent — a symptom, perhaps more than anything else, of the September 2014 closing of Revel Casino Hotel, which took a raft of well-regarded third-party restaurants with it.
How Atlantic City Plans To Lure "Young, Wealthy New Yorkers"
Posted in: In The News on Thursday, April 07, 2016
The 2014 shuttering of four of Atlantic City’s twelve casinos should have surprised no one and yet managed to shock everyone. Triggered by new gaming competition in surrounding states, the closings killed 8,000 jobs. Tax revenue, which had started falling with the recession, nose-dived. According to Atlantic City Mayor Don Guardian, who calls the situation "dire," Miss America's stomping ground has lost 70 percent of its tax base in five years. Meanwhile, last December, Moody's Investors Service issued a report predicting more casino closings; the best bet to fold next is the Trump Taj Mahal (now owned by Carl Ichan), currently embroiled in a bitter labor dispute with the workers of Local 54. And then there's state lawmakers' push to open North Jersey up to gambling, an event Guardian believes would be "quite disastrous" for his town should it happen. Still to come for the beleaguered city is possible bankruptcy or a state takeover so far-reaching Guardian quipped at a news conference that it would amount to a "fascist dictatorship." Should the city government shut down, essential services will continue and hotels, restaurants, casinos, spas, shops and nightclubs will remain open for New Yorkers looking for a spring fling in Atlantic City. And despite A.C.'s economic issues, it's showing some of signs of life as the weather warms. There are great travel deals to be had right now from properties like the Borgata, which is offering a number of mid-week specials. You're likely to have a better chance of getting a prime time table at Bobby Flay Steak versus Gato on Lafayette Street, or Old Homestead Steak House compared to its Meatpacking District original—of course, a half-empty dining room might feel more like The Shining than a scene from The Color of Money. In addition, bargain hunters will appreciate Bally's, Caesars and Harrah's semi-annual sales. Even if most real estate is going for Baltic Avenue prices, all is not lost in the city that inspired Monopoly. Guardian is quick to point out how many of the city's remaining casinos are evolving to emphasize pleasures other than gaming. "Borgata, Harrah's, Golden Nugget, Resorts and Tropicana each have spent $100 million retooling their properties," Guardian tells us, "and they went from being casinos to being resorts. They added some of the hippest nightclubs on the East Coast, they brought in world class spas and they added fun dining and fine dining as well as retail to the mix." In the meantime, the state-run Casino Reinvestment Development Authority has been focusing on "creating an environment that encourages visitation through conventions, trade shows and entertainment venues," says CRDA Executive Director John Palmieri. The agency, which uses gaming revenue collected from casinos to support city improvement projects, helped fund the 200,000-square-foot Harrah's Conference Center and Bass Pro Shops that have opened in the past few years. While big-box brands alone won't snag visitors from cities like New York and Philadelphia, CRDA's concerts on the beach just might. Last summer 80,000 people flocked to see Maroon 5 and Rascal Flatts. This year the city will serve up a half-dozen shows in the sand and sun, concerts in venues like Boardwalk Hall, and its first-ever Ironman competition. Other new attractions include developer Bart Blatstein's entertainment complex that opened in the former Pier Shops at Caesars last year. While reviews of The Playground have been mixed, the man who reinvented Philly's Northern Liberties neighborhood isn't worried. "We had the largest New Year's Eve party ever in Atlantic City," says Blatstein. "We had over 5,000 people! People want a reason to come to Atlantic City. You just have to give it to them. It's been like Groundhog Day there—there hasn't been anything new. But there's a rebirth starting in Atlantic City, and it will be reborn into something different than it's ever been." Go Big Or Go Home If Blatstein has his way, that something could be a gleaming resort town owned in large part by his Philadelphia-based company Tower Investments. Blatstein—who Guardian calls "one of my heroes"—is set to redevelop Garden Pier and recently picked up the Showboat casino, a casualty of the 2014 bloodbath, for $23 million. "I bought that gigantic, 3-million-square-foot property for what you'd pay for a beachfront house in East Hampton," Blatstein notes. "I'm not stopping there. It's an incredible opportunity. I'm working on three other Atlantic City properties right now." (In other interviews, he's said emphatically that A.C. needs to be an "adult playground," targeting "young, wealthy New Yorkers.”) Blatstein isn't the only developer scooping up chunks of Atlantic City at rock-bottom prices. Quirky Florida billionaire Glenn Straub recently netted the biggest white whale of them all, the infamous Revel casino, which cost $2.4 billion to build, went bankrupt twice and closed after less than three years. Straub, who scored Revel for four cents on the dollar, says he'll have 500 rooms open by mid-June. He also wants to rope in high-rolling clientele from Manhattan and other environs via helicopters, seaplanes and prop planes, landing the latter at the city's defunct Bader Field, which in recent years has been successfully used as a summer concert venue. Straub doesn't own it yet, but plans to have it up and running within a year. And then there's Boardwalk Hall and the Atlantic City Convention Center. Straub says he's going to buy them from the CRDA, part of his grand scheme to remake Atlantic City, which includes building polo fields, water parks and an extreme sports complex. "The town should be a resort, like it used to be when I was six years old and came here," Straub explained. "It's ideal for that. We'll have real estate values up four times what they are now in ten years, mark my words." If it sounds like Straub's dreaming, Atlantic City has always been a place for dreamers, a city where fantasy takes form. "I think that's why people came to Atlantic City for the last 160 years," muses Guardian. "You came because your city didn't have a boardwalk, or you never saw a woman sit on top of a horse, climb up a platform and jump into a pool."