Atlantic City got a double shot of good news on Monday, as first quarter casino profit numbers were up nearly one-third and the city finally agreed to terms with the state on a financial rescue package.
According to figures released Monday by the New Jersey Division of Gaming Enforcement (DGE), AC’s eight remaining casino operators reported total revenue of $802.6m in the three months ending March 31, a 2.7% improvement over the same period last year.
The revenue numbers were similarly positive when broken down by gaming ($583m, +3.5%), rooms ($88.5m, +2.6%) and entertainment ($32.8m, +1.5%). Only food and beverage spoiled the party, falling 1.6% to $98.3m. Hotel occupancy rose one point to 73.8%.
All but one of the eight casinos reported an operating profit in Q1, led by perennial frontrunner the Borgata at $47.7m (+24%), nearly twice that of its closest competitor Harrah’s ($26.8m, -3.1%). Only the Trump Taj Mahal was in negative territory, losing $4.6m, although that’s better than the $8.7m the property lost in Q1 2015. Collectively, the eight casinos posted a profit of $105.6m, up 31% year-on-year.
The profit figures include contributions from the casinos’ online gambling operations, except for Caesars Interactive Entertainment NJ, which reported a gross profit of $2.5m versus a $616k loss last year; and the fledgling Resorts Digital, which reported a loss of $1.25m, 14.2% worse than last year.
AC RESCUE PACKAGE GIVES CITY FIVE MONTHS TO DETERMINE OWN FATE
Meanwhile, Monday saw a resolution to the interminable squabbling over the fiscal future of AC’s municipal government. The state Assembly and Senate agreed on a package that gives AC a temporary loan of around $60m this year, another $15m in 2017, and five months in which to bring some semblance of order to its financial affairs.
The city’s unionized workers managed to hold on to their collective bargaining rights, which wasn’t part of the original plan proposed by the Senate. The compromise deal also prohibits casinos from opting out of a PILOT (payment in lieu of taxes) plan – which will ensure AC can count on a predictable revenue stream over the next decade – even if voters approve the north Jersey casino ballot referendum this November.
AC mayor Don Guardian praised the new deal as “very fair” and said it was now up to the city to figure out how to make their finances work. Should the city’s Community Affairs department ultimately conclude that AC’s rescue plan is insufficient, the state will be allowed to seize control of the fiscal rudder and impose its own sense of order.
Both of the state’s legislative chambers are expected to have a final vote on the compromise deal on Thursday, after which it will be up to Gov. Chris Christie whether to sign it.