|By Suzette Parmley, The Philadelphia
InquirerMcClatchy-Tribune Regional News
Aug. 12, 2008 - ATLANTIC CITY -- The summer of discontent continued for the gaming industry here as the 11 casinos reported a 6.6 percent decrease in gambling revenue in July from a year ago.
The casinos reported $438.7 million in casino wins, or the amount gamblers lost, down from $469.6 million in July 2007, according to figures released yesterday by the New Jersey Casino Control Commission.
The dismal numbers come during what is considered a peak month for the casinos here, as the Jersey Shore typically swells with vacationers.
Nine of the gambling halls registered revenue decreases, as high as 22.8 percent at the Atlantic City Hilton and as low as 3.8 percent at Caesars.
Only Harrah's Marina Resort and the Borgata Hotel Casino & Spa -- both in the city's Marina District -- registered increases of 19.7 percent and 1.9 percent, respectively. The two casinos, not by coincidence, also recently rolled out major new hotel towers next to their casinos, which increased traffic to both.
The next and last of the triumvirate of casino-hotel expansions this year will be the 782-room Chairman Tower at Trump Taj Mahal, which plans a phased opening starting Labor Day weekend and is intended to help boost Donald J. Trump's flagship casino here. The Taj reported a 19.1 percent revenue decrease last month.
The numbers for Atlantic City were reflective of a bigger malaise for the U.S. gambling industry. Second-quarter earnings ended June 30, reported last week by several major companies with properties in Las Vegas and Atlantic City, showed a bleak picture:
Trump Entertainment Resorts Inc., which owns the Taj Mahal, Trump Plaza and Trump Marina in Atlantic City, reported a 4.8 percent decrease in net revenue.
Harrah's Entertainment Inc., which owns four casinos in Atlantic City -- Bally's, Showboat, Harrah's Marina Resort and Caesars -- reported a 3.7 percent decrease in net revenue.
Boyd Gaming Corp., which co-owns the Borgata with MGM Mirage, was down 10 percent year-over-year, while MGM was down 2 percent in net revenue.
The double-digit dip was enough for Boyd to announce it would delay until 2009 the construction of the $4.8 billion Echelon, a megacasino resort planned for the Las Vegas Strip.
"The delay gives us time to focus on restoring momentum in our core business and for consumers in general to regain their footing and their confidence," said Rob Stillwell, spokesman for Boyd Gaming out of Las Vegas, during a conference call. "We hope to resume construction in three to four quarters, assuming credit-market conditions and the overall outlook for the economy improve."
For Atlantic City, gambling experts say the softened economy, rising gas prices, slots competition from Pennsylvania and New York, and a partial smoking ban in the casinos since April 2007 continue to erode the industry's gaming revenue. They predict the climate will get only tougher as the partial smoking ban becomes a full ban Oct. 15.
"July is one of the two big months for Atlantic City, of course," said Bill LaPenta, director of financial analysis for Spectrum Gaming Group L.L.C., in Linwood. "The 6.6 percent decline is about on pace with [casinos'] year-to-date decline. The decline might have been less were it not for the decline in table games, which contributed more than usual for the month."
Slots revenue was down 7.2 percent in July, while table-games revenue was down 5.1 percent.
By comparison, the seven operating slots parlors in Pennsylvania took in $151.2 million in gross slots revenue for the month, led by PhiladelphiaPark with $31.3 million.
Yesterday, as the clouds broke for sunshine on the Boardwalk, Cal Mazzo, 83, a retired salesman from Reading, remained bullish on Atlantic City, despite the challenges.
Mazzo took a "cigar break" on the Boardwalk from playing the poker machines at Resorts and Showboat. He comes to the resort every other week, he said, with his wife, Mary, 80.
"I like the idea you can go to a variety of casinos here, and you have the ocean and the Boardwalk," he said. "We enjoy it."
But Mazzo revealed he was somewhat insulated by the recent concerns over gasoline prices.
"I come on a bus," he said. "The bus pays the gas."
New Jersey gambling revenue
July gross revenue at Atlantic City's 11 casinos totaled
$438.7 million, 6.6 percent below a year ago.
Hilton $22.3 -22.8%
Bally's $56.4 -8.2%
Borgata, $71.9 1.9%
Caesars $56 -3.8%
Harrah's Marina $56.6 19.7%
Resorts $21.3 -19.7%
Showboat $34.5 -11.2%
Tropicana $34.5 -5.5%
Trump Marina $19 -20%
Trump Plaza $25.6 -6.3%
Trump Taj Mahal, $40.6 -19.1%
Contact staff writer Suzette Parmley at 215-854-2594 or email@example.com.
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