Atlantic City Revenue Down 9.5% To $308.2m In July

Atlantic City’s woes seem set to continue after posting its financial figures for July, revealing a 9.5% decline in revenue to $308.2 million compared to the same month in 2011. During the month, slots revenue dropped by 8.9% while table games was also down by 11%.
Affecting July’s results was widespread power outages in New Jersey, which also affected Atlantic City casinos. Nevertheless, the East Coast gambling resort has been in a downward trend for five years now, with bigger problems besetting Atlantic City including a struggling US economy, as well as increased competition from neighboring states. In 2006, for instance, Pennsylvania introduced casino gambling for the first time and last year managed to supplant Atlantic City as the 2nd biggest gambling resort in the US.
Putting a positive spin on Atlantic City’s July figures, Tropicana Casino president Tony Rodio, said: “I thought it would be a double-digit decline. I am, believe it or not, a little encouraged by the results.”
Adding further credence to his optimism, numerous casino markets were down across the US in July, including Pennsylvania which saw its slot revenue fall by 2.5%. In addition, this year July contained one less weekend compared to last year and combining AC’s June and July tallies would show a decline in revenue of 5%, instead.
However, dampening the mood somewhat, was the $2.4 billion casino development called Revel which opened its doors for the first time in May. The lifestyle resort contains the first new casino to open up in AC since 2003, and high hopes were placed on it providing a much needed boost to the local gambling market. Unfortunately, with such a huge investment Wall Street analysts believe Revel needs up to $30 million every month just to kep afloat. In July, however, Revel generated $17.5 million in slots and table games revenue, and as Andrew Zarnett of Deutsche Bank AG commented:
“With the number less than $20 million, I would say unless Revel can dramatically increase their gaming revenue, it will be hard for them to generate free cash flow and therefore, make their debt service payments. More revenue generation is needed, and time is running out as summer is nearly over.”
Atlantic City casinos will now be hoping for favourable August weather to bring in more gamblers to the resort and give its beleaguered casinos a much needed boost.