Atlantic City Revenue Continues on Downward Trend With July Numbers
Another tough month for the heart of live casino gambling on the East Coast, as Atlantic City casino revenue reports for July 2013 revealed an overall dip of 4% when compared to numbers from a year ago.
Total July revenue for Atlantic City’s casinos added up to $297.2 million, down from $308.2 million in July 2012 and mile away from the city’s revenue peak of $504.8 million in 2005.
Majority of casinos continued 2013 slide
Of the 12 casinos operating in Atlantic City, nine saw a year-over-year decrease in July.
Tropicana and Trump Plaza were hardest-hit in terms of percentage decline, with both casinos witnessing a drop off of roughly 25%.
Tropicana also won the dubious honor of the largest absolute hit in pure dollar terms. The casino brought in over $7 million less in July 2013 than in July 2012.
The Showboat casino took the second-largest hit in dollar terms, with over $4 million shaved off their July 2012 numbers.
Compared to those staggering drops, the revenue decreases experienced by the Golden Nugget (-2%), the Atlantic Club (-3%) and Caesars (-5%) seem downright mild.
Revel and Borgata the bright spots for Atlantic City
Those looking for bright spots in the July 2013 numbers can point to one of two casinos: Revel and the Borgata.
Revel managed a 33% increase year-over-year, climbing nearly $6 million over their July 2012 revenue numbers. Much of that increase is likely attributable to the casino’s much-discussed “Gamblers Wanted” promotion, which sought to attract patrons to the once-distressed casino via the promise of lucrative loss refunds on slot play.
For their part, the Borgata grew almost 20% from 2012 levels thanks to an additional $10.3 million in revenue. Unlike Revel, Borgata focused less on a single promotion and more on the casino’s 10th anniversary celebration as a way to boost interest in the property.
That strategy paid big dividends, as the Borgata – already the largest casino in Atlantic City in terms of average revenue – increased their lead over the next-closest competitor to just shy of $30 million.
Resorts Casino – who still hope to see their proposed online partnership with PokerStars approved by NJ regulators – was the only other Atlantic City casino to post revenue growth in July, adding $800,000 to their July 2012 numbers for a total haul of $13.9 million in July 2013.
Maintaining gains could be a problem for Revel
While Revel’s performance in July was impressive for any casino – let alone one that just emerged from bankruptcy – maintaining that momentum could prove difficult for the casino.
For one thing, the “Gamblers Wanted” promotion thought to be responsible for so much of the casino’s outstanding July performance has now drawn to an end. And the promotion has started to attract a fair amount of negative attention – including a lawsuit in U.S. federal court – from players who contend that Revel was less than upfront about the actual rules and terms of the promotion.
Combine the natural decline that should accompany the promotion’s end with the potential backlash from disappointed gamblers and Revel could easily give back much – if not all – of July’s gains in the months to come.
Fingers pointed at ever-growing regional competition
Atlantic City’s revenue woes are far from a recent trend. In fact, annual numbers have been on a non-stop decline since 2005. And every month in 2013 so far has represented a decline from 2012.
Pinpointing the precise reason for the continued loss of revenue is a complex affair. But the favored culprit – and certainly the most obvious – is the growth of regional competition from states such as Pennsylvania, Maryland and Delaware.
With more and more casinos on the horizon in those states, and other states in the region such as New York moving toward allowing expanded gambling, it’s difficult to see an obvious way for New Jersey to reverse the slide.
Could online gambling turn the revenue tide?
One spot of hope for those invested in Atlantic City’s future is legal online poker and casino gambling, which is expected to not only rewrite the history of online poker in the U.S. at large, but also eventually add hundreds of millions to the bottom line of New Jersey casinos such as Caesars and the Taj Mahal.
But the key word there is eventually, as only a handful of properties are expected to come online on the planned November 26th launch date. And while most agree that online gambling brings the potential for a nine-figure revenue boost, not everyone agrees that New Jersey’s casinos are in the best position to exploit that opportunity.
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