Atlantic City revenues down for seventh year running
Full-year results for 2012 show US$268m drop in gaming revenues " Revel makes $111m loss.
Atlantic City gaming revenue fell by 8.1% year-on-year in 2012, giving its casino industry its seventh consecutive year of decline.
With Hurricane Sandy significantly disrupting business in the fourth quarter, the results will be seen as further justification for Governor Chris Christie’s decision to legalise online gambling in New Jersey in February.
The city’s casinos attracted US$3bn in gaming revenue in 2012 compared to $3.3bn the previous year, with total turnover for the fourth quarter ended 31 December 2012 down 17%.
The fourth quarter was hit by Hurricane Sandy, which forced all casinos to close between 28 October and 5 November, as well as cancelling various conventions, conferences, concerts, trade shows and fairs.
The Borgata, co-owned by Boyd and MGM – whose 50% stake is being held in a trust while it reapplies for licensure – recorded the highest net revenue by far at $686m, a 6% decrease compared to 2011. Meanwhile Harrah’s net revenue saw a 5.7% slide, falling from $467m in 2011 to $441m in 2012.
However, Harrah’s recorded greater gross operating profit than the Borgata. Its gross operating profit grew 12.9% year-on-year from $112m to 127m, while the Borgata’s decreased 26.4% from $163m to $120m.
Four casinos made losses in 2012 “ the Atlantic Club, which PokerStars is aiming to acquire if the operator is licensed by state regulators, Golden Nugget, Resorts and Revel, which filed for Chapter 11 bankruptcy last month and made a $111m loss in 2012, despite only opening in March.
Apart from Harrah’s, Bally’s and Tropicana also recorded a rise in profitability. Bally’s gross operating profit increased 25.7% year-on-year from $48.7m to $61.3m, while the Tropicana saw a 2% rise in 2012 at $18m compared to $17.6m in 2011.
Atlantic City’s continuing decline was the key driving force for calls to legalise online gambling in February, although the 12 casinos will see little income if any from this in 2013. The New Jersey Division of Gaming Enforcement anticipates the market to go live by 16 November, with the first full year of operation expected to begin in 2014.