At­lantic City casi­nos post 1st rev­enue in­crease in 10 years

The Reporter (Lansdale, PA) - - BUSINESS - By Wayne Parry

In­ter­net gam­bling helped At­lantic City’s casi­nos post their first rev­enue in­crease in a decade.

Fig­ures re­leased Thurs­day by New Jersey gam­bling reg­u­la­tors show the casi­nos won $2.6 bil­lion from gam­blers in 2016, an in­crease of 1.5 per­cent from a year ear­lier.

The last time At­lantic City casino rev­enue in­creased was in 2006, just as a wave of Penn­syl­va­nia casi­nos be­gan open­ing and draw­ing away At­lantic City’s cus­tomers. The city had 12 casi­nos that year; now it has seven.

Only two casi­nos posted rev­enue de­clines dur­ing the year, in which less com­pe­ti­tion and a con­tin­u­ing boost from New Jersey’s na­tion-lead­ing on­line gam­bling in­dus­try helped At­lantic City casi­nos start to find a new equi­lib­rium. It fol­lows a bru­tal three year-pe­riod that saw five casi­nos close and 11,000 jobs lost.

The Trump Taj Ma­hal, which was opened by Pres­i­dent-elect Don­ald Trump in 1990, shut down on Oct. 10. But Matt Levin­son, chair­man of the New Jersey Casino Con­trol Com­mis­sion, thinks better days are ar­riv­ing for At­lantic City’s casino in­dus­try.

“These are some strong num­bers, es­pe­cially with all the bad news about At­lantic City’s ‘demise,’” he said. “There’s a lot of good news here. We have some stronger casi­nos now, and in­ter­net gam­bling con­tin­ues to in­crease. The hope is we’re en­ter­ing a sta­ble en­vi­ron­ment now.”

Tom Polh­man, gen­eral man­ager of the Golden Nugget, said the At­lantic City mar­ket has “right-sized it­self to the point where we’re not over-sat­u­rated any­more. I’d like to think things had hit rock bot­tom and we’ll all get better from here.”

In­ter­net gam­bling rev­enue in New Jersey rose by more than 32 per­cent last

year to nearly $197 mil­lion. New Jersey is one of three states in the U.S. where in­ter­net gam­bling is le­gal, along with Ne­vada and Delaware, but New Jersey is by far the largest on­line mar­ket.

It is di­vided among five com­peti­tors: Bor­gata ($47 mil­lion); Golden Nugget ($42.2 mil­lion); Cae­sars In­ter­ac­tive-NJ ($38.6 mil­lion); Trop­i­cana ($36.9 mil­lion) and Resorts Dig­i­tal ($31.7 mil­lion).

The seven sur­viv­ing casi­nos also saw their on-premises win­nings from gam­blers in­crease by 2.1 per­cent last year to $2.28 bil­lion. When the Taj Ma­hal is in­cluded in the com­par­i­son, the eight casi­nos saw a col­lec­tive rev­enue de­crease of 0.3 per­cent.

When rev­enue from slot ma­chines, ta­ble games and in­ter­net op­er­a­tions is in­cluded, only two of the seven cur­rently op­er­at­ing casi­nos saw their rev­enue de­cline last year. Har­rah’s was down 4.3 per­cent to $358 mil­lion, and Cae­sars was down 2.7 per­cent to $302 mil­lion.

The Bor­gata re­mains At­lantic

City’s top casino; the $769 mil­lion it took in last year was more than twice the to­tal of its near­est com­peti­tor, Har­rah’s. The Golden Nugget ($251.9 mil­lion) and Trop­i­cana ($341.1 mil­lion) each posted 9 per­cent rev­enue in­creases for the year.

For the month of De­cem­ber 2016, the seven sur­viv­ing casi­nos won $208 mil­lion, an 8.6 per­cent rev­enue in­crease over the De­cem­ber 2015 fig­ure.

David Schwartz, di­rec­tor of the Cen­ter for Gam­ing Re­search at the Univer­sity of Ne­vada-Las Ve­gas, said At­lantic City still needs to fo­cus on its re­cent ef­forts to di­ver­sify its of­fer­ings be­yond casi­nos.

“At this point, it should be clear that re­ly­ing on gam­ing rev­enues is not the way ahead,” he said. “There needs to be a fo­cus on broader tourism and diver­si­fi­ca­tion into non-hos­pi­tal­ity ar­eas.”

Penn­syl­va­nia’s Gam­ing Con­trol Board es­ti­mates its 2016 casino rev­enue will be about $3.2 bil­lion once fi­nal fig­ures are re­ported, an in­crease of about 1 per­cent.

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