Atlantic City casinos down again in July; Caesars sells Macau golf course at a loss

TAGs: Atlantic City, Caesars Entertainment, caesars entertainment corp., Macau, New Jersey Online Gambling, pearl dynasty investments

atlantic-city-caesars-macau-golf-courseAtlantic City casinos continued their losing ways in July, as their collective gaming revenue fell 3.6% year-on-year to $297.2m. The New Jersey Division of Gaming Enforcement (DGE) – which cynically stopped using any adjectives suggesting negative trends a few months back and now refers only to unspecified “variance” and “change” in the monthly tallies – reported table game revenue at AC’s dozen casinos fell 3.3% to $81.7m while slots revenue fell 3.7% to $215.5m. (Could the summer heat be to blame?) Total gaming revenue over the first seven months of 2013 is down 9.6% to $1.68b.

Three AC casinos showed revenue improvements in July, with the market leading Borgata up 18.9% to $64.2m. Revel saw an even bigger bounce, up 33.4% to $23.4m, although much of the boost is likely the result of Revel’s aggressive marketing regarding slot loss refunds that turn out not to be all that refundable. The least of the month’s gainers was Resorts Casino Hotel, where business rose 6.2% to $13.9m.

As for the month’s nine losers, the Trump Plaza was bottom man on the totem pole, earning a mere $8.1m (-24.9%). Just above the Plaza was the Golden Nugget’s $12.9m (-1.6%) and the Atlantic Club has apparently exhausted the $11m cushion it received/purloined from PokerStars, as its total dipped 3% to $14.2m. The rest of the lineup, in ascending order, looked thus: Showboat ($18.6m, -19%), the Tropicana ($20.7m, -26%), Bally’s ($24.3, -13.9%), Trump Taj Mahal ($26.6m, -10.6%), Harrah’s ($34.8m, -10.7%) and Caesars $35.2m, -4.6%).

While Caesars may be doing better than most in Atlantic City, Friday finally brought some closure to Caesars’ tragically inept presence in Macau. After officially throwing in the towel in October, Caesars has sold its 175-acre golf course in Macau to Asian developer Pearl Dynasty Investments for $438m. Caesars paid $578m when it acquired the property in 2007 in the hopes of receiving the regulatory okay to build a casino, but that okay never came. As more than one internet wit has observed today, only Caesars could find a way to lose money in Macau.

Proving once and for all that investors are an overly excitable bunch lacking higher brain function, news of the sale sent Caesars stock up 4.2% to close Friday’s trading at $18.37 after briefly touching an all-time high of $18.73. Caesars says it will use the expected net proceeds of $420m to help chip away at its $23.7b in debt, creating the even more exciting possibility that Caesars’ Q3 numbers might actually show a profit, a phenomenon about as rare as celestial visitations by Halley’s Comet, so be sure not to miss out on the fun three months hence.


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