Atlantic City’s February gambling revenue may be one of the first signs that Hurricane Sandy’s effects on the industry is lessening.
“I’m keeping my fingers crossed, and I’m hoping we get Sandy completely behind us,” Tony Rodio, head of the Casino Association of New Jersey and president of Tropicana Casino and Resort, said of the hurricane, which is blamed with causing one of the steepest revenue slumps Atlantic City has ever recorded.
While the industry continues to lose market share compared to a year ago, when there was less casino competition in the Northeast, there is starting to be more activity than a month ago.
A one-month 3 percent uptick in February is evidence Sandy’s impact may be waning, some casino executives said.
Casino wins in February totaled $212 million, an increase of $6.8 million from a month earlier. The increase would be unremarkable in most years, because it reflects the typical seasonality in Atlantic City’s market. But this is not a typical year. Atlantic City is coming off one of its most dismal fall seasons during which Sandy caused a five-day shutdown of the industry, and widespread storm damage across the Northeast kept would-be visitors away.
In October, Atlantic City’s gambling revenues dropped a record 24 percent compared with the prior month. In comparison, the six prior years had an average drop of 7 percent between September and October.
February’s return to Atlantic City’s more typical fluctuations may mark a move away from the overall slump caused by Sandy. Rodio, who was “encouraged” by February’s returns, said results from the next few months as the weather warms and Atlantic City starts to greet more visitors will determine whether Sandy’s effect is truly behind Atlantic City.
“That’s when we’ll truly be able to say that,” he said.
Atlantic City also is facing much more competition from neighboring markets than ever before, and individual casinos in the city are fighting to increase their share of gambling dollars to the detriment of their competitors in the city. While the resort has worked to increase its nongambling amenities and draw visitors who are spending money in restaurants, hotels and other attractions outside of the casino floor, most Atlantic City casino executives acknowledge that increasing their property’s gambling revenue comes at the expense of another casino losing that business.
“They are going to be taking it from some of the other 11 casinos,” Rodio said.
February’s slight uptick may have been helped by a sluggish January, which may have had three additional days but also featured a calendar that had New Year’s Day occurring midweek, deterring revelers from staying longer at casino hotels, officials said. The first month of 2013 — typically a low point for casino visitation — also recorded more snow in Atlantic City — a total of 6 inches compared with less than 3 inches in February, according to the National Weather Service.
While up from one month ago, February’s gambling revenues were down almost 13 percent from the same month last year. That may be reflective of many factors, including an extra day last leap year and slightly warmer weather conditions, officials said. February 2012 had an average temperature of 40 degrees, or about 5 degrees higher than this year.
What likely played a much larger role was the pressure from new casinos only two or so hours away, said Joe Lupo, senior vice president of operations at Borgata Hotel Casino & Spa.
Last year, several casinos opened in nearby states, including in Pennsylvania and Maryland, and others ramped up their offerings, such as Empire City Casino at Yonkers Raceway in New York. Those casinos are now taking business away from Atlantic City but they weren’t last February, skewing year-over-year comparisons, Lupo said.
But with the deluge of new casino openings subsiding, comparisons later this year will be more reflective of how Atlantic City stacks up to the changed casino landscape in the Northeast, Lupo said.
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