Atlantic City gaming revenue stays on 6-year skid

One lone gambler , Bill Cruise of Brooklyn, was alone on the gaming floor of Revel Casino just before midnight on Nov. 30. ELIZABETHROBERTSON / Staff
One lone gambler , Bill Cruise of Brooklyn, was alone on the gaming floor of Revel Casino just before midnight on Nov. 30. ELIZABETHROBERTSON / Staff
Posted: January 11, 2013

ATLANTIC CITY - In 2012, casinos here saw another decline in gaming revenue, continuing the trend of the last half-dozen years - since Pennsylvania casinos entered the picture.

Total gambling revenue last year was $3.05 billion, down 8 percent from $3.3 billion the previous year, according to numbers released Thursday by the New Jersey Division of Gaming Enforcement.

A silver lining, if there was one, was that December's casino revenue fell only 8.9 percent from the levels of a year ago, to $223.5 million. That represented a vast improvement from November's revenue, which had dropped nearly 28 percent, primarily because of Hurricane Sandy.

The storm struck on Oct. 29 and caused Atlantic City's dozen casinos to shut for four-plus days. Perhaps no casino was affected more than the $2.4 billion Revel, which had only been open seven months and still trying to gain a following.

Underscoring its financial struggles, Revel was recently approved for another $150 million in credit financing to help it get through the slow winter season. It burned through the $100 million in new credit it received in mid-August in less than four months.

In December, Revel finished 10th among the 12 casinos in gambling revenue - up one notch from November when it was second to last. The casino generated about $9.9 million from its 2,450 slot machines and 160 table games, just ahead of Resorts at $9.5 million and Trump Plaza at almost $6 million.

"In December, we continued to focus on our overall casino experience, which resulted in an improvement in our gaming revenue," Revel chief executive officer Kevin DeSanctis said in a statement Thursday. "In connection with the changes to our leadership team, we will continue to improve customer service and roll out new amenities for our guests."

After getting the second credit infusion, $150 million, Revel's owner announced it would use some of the new money for a high-limit slot lounge, an expanded players' club, three restaurants "accessible to a broader audience," and expansion of the casino's quick-serve food options.

Revel has been criticized for being too expensive, not having a buffet like the other Atlantic City casinos, and being the first fully non-smoking casino here.

DeSanctis said a Digipit will be enhanced with additional live-gaming tables, plus multiple big-screen televisions for sports and other viewing.

"In 2013, we will continue to host major entertainers in Ovation Hall," he said. "We have an exciting year planned, and we are confident that our guests will enjoy the positive changes taking place."

Hurricane Sandy had an impact on the entire Atlantic City market, and business volumes have yet to ramp back up to pre-storm levels. The Division of Gaming Enforcement reported that in the three post-hurricane weeks, gaming revenue here was down an average of 13 percent.

Prior to the storm, casino revenue was down 4.8 percent through September.

Conspicuously absent from the gambling halls here in recent months have been patrons from places like Queens, Staten Island, and other areas slammed by the hurricane that are still trying to recover.

“Today’s results are not surprising, as we expected gaming revenues to trend down given the aftermath of Hurricane Sandy with road closures, power outages, gas rationing continued for a prolonged period after the storm,” said gaming analyst Andrew Zarnett in a note to investors Thursday.

Nine of the 11 Atlantic City casinos that were open last year saw revenue declines last month, including market-leading Borgata. It generated about $54 million in December, a monthly decline of 3.3 percent, and saw a 6.0 percent revenue drop for the year from 2011.

Harrah's Resort and Caesars rounded out the Top Three, at $28.9 million and $24.4 million last month.

The only two casinos to report an increase in revenue last month were the Atlantic Club, to nearly $10 million, up 11.1 percent, and the renovated Golden Nugget, up 7.4 percent, at $10.7 million.

In his State of the State address on Tuesday, Gov. Christie said Sandy cost New Jersey more than 8,000 jobs in November, mostly in the leisure and hospitality industries, which include the casinos.

Bob McDevitt, president of Unite Here-Local 54, which represents 14,000 casino and hotel workers at the Shore resort, put the job losses in perspective.

"About one-third of my membership is on reduced workweek - mostly due to the winter and [business] volumes are down," he said. ". . . We haven't recovered."

"The major impact from Sandy was in November and December. January feels like a normal January, like we've had in the past three or four years. November felt like the bottom fell out," McDevitt said.

"A lot of the members are in great need," he said. "There is so much going on . . . not just the layoffs and the reduced workweek, but a lot are looking for a place to live because of the storm's impact. They may be working full time, but they are living at a relative's house because their house was flooded out."

Of Revel's struggles, McDevitt said he didn't think the ship could be righted at this point. Local 54 has locked horns with Revel from the start because it is the only fully, non-union casino here.

"They are going to burn $150 million before the winter's out," McDevitt said. "No doubt."

But Revel isn't the only one with problems. Atlantic City's overall gaming-revenue struggles claimed another casualty last Friday when Don Marrandino, Eastern Division president for Caesars Entertainment Inc. stepped down.

All four of Caesars' casinos here posted significant revenue declines for 2012, and all four reported declines last month - ranging from 5.4 percent at Showboat to 19.9 percent at Bally's .


Contact Suzette Parmley at 215-854-2855 or sparmley@phillynews.com.

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