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Atlantic City's Shutdown Costing the 12 Casinos
 Up to $16 million in Revenue per Day
By Suzette Parmley, The Philadelphia InquirerMcClatchy-Tribune Business News

July 6, 2006 --ATLANTIC CITY -- The gamblers have left the buildings, and the casino industry is hoping that they will come back once the state government settles its budget impasse.

As of 8 a.m. yesterday, casino gambling here halted for the first time in 28 years. About 45,000 casino employees are coming to grips with a work stoppage unlike any that has occurred since the first gambling hall opened here in 1978.

Coming during one of the peak months for Atlantic City's gambling business, the casino shutdown is costing the 12 casinos up to $16 million in revenue per day. And it is costing the state treasury about $1.3 million in taxes.

Instead of buses filled with gamblers heading to play the slots at Atlantic City, today will likely mean buses filled with about 1,000 angry casino workers and supervisors making a beeline to Trenton to give the governor and legislators their two cents about the budget crisis.

"There's no moral right to put these people out of work," Bob McDevitt, president of Unite Here Local 54, which represents about 16,000 casino and hotel workers, said yesterday at a news conference at the local's headquarters in Atlantic City. McDevitt chastised lawmakers in Trenton for the budget deadlock that he said was costing his members tips and wages that were lost forever.

"They need to put these people first and not their political ambitions," he said.

The magnitude of the shutdown weighed on all of the casino operators. "I always say that losing one day in July is like losing five days in January," said Mark Juliano, chief operating officer of Trump Entertainment Resorts Inc., which operates three casinos here.

While all hotels, restaurants, retail stores, nightclubs, spas and bars that are not on the gambling floor in the casinos are expected to remain open, many visitors could be seen with bags packed waiting to leave town. Some casino executives anticipate having lots of empty hotel rooms starting today as gamblers cancel their reservations.

Many workers and patrons described the scene at the casinos as "surreal."

At Caesars at midmorning, a casino floor that measures about 11/2 football fields was quiet and nearly empty, save for security guards, state police and cleaning crews. The illuminated progressive jackpot bonus signs, which typically flip higher and higher, were frozen at their last recorded amounts. Maintenance workers could be seen changing light bulbs and putting new upholstery on chairs and stools.

Edwin Barahona, 28, a bar porter at the Toga Bar at Caesars, was standing around with no one to serve drinks to. "Yesterday, it was big business," he said, referring to the Fourth of July holiday. "Today, it's no business."

At $5 billion in annual gaming revenue, Atlantic City is the nation's second-largest gambling destination, after Las Vegas.

However, investors apparently did not like the odds of the budget standoff either. They pushed shares of companies that own casinos in Atlantic City lower, on a day when the overall stock market was down. Shares of Harrah's Entertainment Inc., a global company that owns four casinos here, were down 1 percent, or 74 cents, to $69.76. Trump Entertainment Resorts Inc., which owns three casinos, all in Atlantic City, fell 4 percent, or 78 cents, to $19.50. Boyd Gaming Corp. and MGM Mirage, the joint owners of the Borgata, were both down about 1 percent.

Standard & Poor's Ratings Service, which issues credit ratings on corporations, said any closure of the casinos lasting less than a week would not have a "meaningful impact" on the financial health of any company involved in Atlantic City.

The New Jersey Casino Control Commission, the agency that regulates the resort's casinos, said yesterday that it would be down to a "skeletal" crew in the wake of the closure.

The dozen casinos here employ about 45,000 and have an annual payroll of $1.2 billion, according to the casino commission. The city attracted 35 million visitors last year, and earned $490 million in state tax revenue.

The shutdown comes at the worst possible season for Atlantic City. The summer peak generates about 40 percent of the casinos' annual revenue. Several of the casino-hotels are usually at full capacity, even at midweek.

Some hotels, like the Taj Mahal, were at half their usual capacity by last night. One person familiar with the clientele drop-off was Fannie Campos, 39, a housekeeper for 11 years at the casino hotel. Campos said she was given the day off today by her supervisor because "there were no hotel rooms to clean" at the Taj.

"There's nobody left. There were maybe three or four rooms still occupied, but they also said they were checking out tonight," she said.

Rob Stillwell, corporate spokesman for Las Vegas-based Boyd Gaming, said major gambling companies and their investors had poured more than $3 billion in capital investment into Atlantic City since 2002 because of its low tax rate and stable regulatory environment.

Atlantic City casinos pay a 9.25 percent tax on gross gambling revenue. Only Las Vegas, which has a graduated tax rate with a maximum of 6.75 percent, is lower. Pennsylvania, which may open slots parlors at racetracks this fall, will tax them at a 54 percent rate. Delaware's tax rate is 51 percent.

Stillwell said several issues were being ironed out by the casinos, including whether employees would be paid during the shutdown. Some employers were urging workers to take their prepaid vacation time now to keep income coming in.

The budget crisis is leading to delays in regulatory work involving several casino expansions. At Trump Taj Mahal, a proposed $200 million, 800-room hotel is under review by the Department of Environmental Protection, but with state workers furloughed, that review is in limbo.

The casinos cannot operate without state gambling regulators on their premises, and they lost in court Friday to declare the monitors "essential employees" who could keep working during a shutdown.

The Casino Control Commission has a staff of 354, and 191 are inspectors who certify gambling revenue and issue licenses that the casinos need to operate.

The ruling, combined with Commission Chairwoman Linda Kassakert's ruling Sunday to halt gambling operations at 8 a.m. yesterday, came as a one-two punch to the casino industry.

At a noon news conference, Kassakert stressed that Atlantic City was "undergoing a renaissance" and likely would overcome its current difficulties. But she, like all the casino operators and their employees, was worried about the harm from a sustained shutdown.

"We're all concerned," Kassakert said, facing about a dozen TV cameras. She said her agency was now planning for the orderly reopening of the casinos as soon she had gotten the word from Trenton that the state had negotiated a budget.

"I'm hoping it will be short-lived," she said of the shutdown. "I'm hopeful Atlantic City will not have a tarnished image."

So do Rick and Mary Casselburg of Lancaster, who at midafternoon yesterday were leaving the Borgata with their bags in tow. The couple had a look of disappointment on their faces as they entered the elevator to the parking garage. It wasn't the Atlantic City getaway they had hoped for.

Rick Casselburg, 46, said the couple had been shopping and walking the Boardwalk on the Fourth of July. "But tonight, we had planned on gambling, and that doesn't look like it's going to happen."

Contact staff writer Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

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Copyright (c) 2006, The Philadelphia Inquirer

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