CASINO

Atlantic City casinos post October gains but fear further competition

TAGs: Atlantic City

atlantic-city-casino-competitionAtlantic City casinos posted a small brick-and-mortar gaming revenue gain in October but a new study is casting doubt on the market’s ability to withstand any more local or regional competition.

Figures released last week by the New Jersey Division of Gaming Enforcement (DGE) showed the nine AC casinos generated land-based gaming (slots and table) revenue of $202.25m in October, up 0.8% from the same month last year but over $22m less than they earned in September.

Slots revenue was up 3.5% to $147.5m while table games slipped 5.8% to nearly $54.8m. For the year-to-date, total slots & table revenue is up 7.7% to $2.25b. The above numbers don’t include the casinos’ sports betting and online gambling operations, both of which were in record-setting mode in October.

In slots & table terms, the Borgata won the month as usual with $51.5m, up 1.5% year-on-year, while the Hard Rock ($24.5m, +5.2%) and Harrah’s ($24.1m, +1.2%) fought it out for second- and third-place. The month’s biggest percentage gain went to the market’s other newcomer, Ocean Casino Resort, which shot up 40.8% to $18.4m.

All told, five of the nine casinos posted positive annual growth in October, but the profitability (or lack thereof) of each casino won’t become apparent until Friday, when DGE releases its latest quarterly report. August’s Q2 report showed the market’s collective profits falling 6.8% year-on-year, with only one casino (Borgata) posting an annual profit gain.

The mid-2018 opening of Hard Rock and Ocean Resort has been blamed for cannibalizing the other seven casinos’ bottom lines. Now a new Rutgers University study has local politicians mulling a change in local laws to ensure the market doesn’t face any new gaming mouths to feed.

The Rutgers study notes that Cordish Gaming’s Live! Casino & Hotel Philadelphia is slated to open next year, adding another 2k slots to the region’s gambling options. The study claims that this extra competition could deprive AC of between $63m and $150m in annual gambling revenue.

In March, Showboat Hotel owner Bart Blatstein floated a plan to add a casino to the property that would work around the 10-year ‘no casino’ deed restriction imposed by former owner Caesars Entertainment when it sold the property in 2014.

New Jersey’s lawmakers have been cool to Blatstein’s proposal and are now studying ways to permanently cap AC’s casino licenses at nine. They might not be able to control what goes on beyond the state line but they appear intent on ensuring they’re not hollowed out from within. At least, not any faster than it’s already happening.

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