People board the ACES train at the Atlantic City Rail Terminal in June. Trains operated at about 80 percent capacity over the peak summer season, but ridership has since tailed off. The number of train trips will be cut from the current 18 to 11 beginning Friday to reflect the traditional slowdown in winter tourism. Anthony Smedile

ATLANTIC CITY — Officials overseeing a rail line that carries casino gamblers from New York to Atlantic City disclosed Tuesday that the trains have lost nearly $6 million in the first year of operation.

To keep the Atlantic City Express Service on track, the state Casino Reinvestment Development Authority approved an extra $2 million in funding to subsidize the operating costs.

In return for the new CRDA money, Harrah’s Resort, Caesars Atlantic City and Borgata Hotel Casino & Spa, which underwrite most of the rail line’s operations, have agreed to keep the trains running for at least two more years, officials said.

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The casino partnership wouldn’t say how many riders have used the service, only that as private companies they never provide ridership figures, even though CRDA money subsidizes the trains.

Dubbed ACES, the train service was launched last February to draw wealthy New York customers to a gaming market that has slumped in the weak economy.

Trains operated at about 80 percent capacity over the peak summer season, but ridership has since tailed off. The number of train trips will be cut from the current 18 to 11 beginning Friday to reflect the traditional slowdown in winter tourism.

Officials had previously refused to divulge the rail line’s financial performance, but revealed for the first time Tuesday that the trains will operate at a $5.9 million loss in the first year.

“We thought we had a break-even operation planned based on New Jersey Transit’s projections of ridership,” said Nancy Wattson, chief financial officer of the Casino Reinvestment Development Authority.

Wattson, speaking at the CRDA’s monthly board meeting, said there is hope the rail line will eventually break even or turn a profit once it fully ramps up. However, another CRDA official expressed concern about the viability of the train service.

“I do wonder how long we can sustain it,” board member Peter F. Cammarano said.

Wattson said Harrah’s, Caesars and Borgata are spending $19 million for operating costs and to buy the luxury bi-level train cars that can carry as many as 300 passengers. The casinos have agreed to pay NJ Transit $3.8 million annually to run the trains.

Previously, the CRDA kicked in $4.5 million to lease the diesel locomotives used on the line. The authority uses funding from Atlantic City casinos for housing projects and economic development.

CRDA Executive Director Thomas D. Carver stressed that the extra $2 million from the authority would be a one-time contribution to the rail line. He said the casinos have agreed not to request any more money. In addition, he noted that the casinos have approached NJ Transit about the possibility of taking over the train service.

ACES spokeswoman Cara O’Donnell said its policy is not to release ridership figures. However, declining passenger loads have prompted operators to cut the fares from the original one-way cost of $50 to $39 round trip and $29 one way.

Maureen Adams, president of ACES, told the CRDA that marketing plans are in the works not only to attract New Yorkers to Atlantic City, but also to entice local travelers to take trips to the Big Apple.

Diane Lusk, a CRDA board member, suggested that ACES should offer hotel, theater, restaurant and shopping packages in New York to make the rail line more appealing to Atlantic City-area travelers. She also said the train schedules should be adjusted to make them more passenger-friendly.

The ACES trains operate Fridays, Saturdays and Sundays only, with a stop in Newark. The trip takes about 2 hours and 40 minutes. CRDA officials said a new stop in Philadelphia should be considered to help boost ridership.

Casinos created the rail line to attract upscale New Yorkers who don’t want the hassle of driving to Atlantic City on traffic-clogged highways. One Atlantic City resident, William Cheatham, said the train service should be given more time to prove itself.

“Don’t derail us in your decision-making for this train,” Cheatham said at the CRDA meeting. “Atlantic City is fighting for survival and needs every avenue to help the casino industry in a rough time.”

Contact Donald Wittkowski:

609-272-7258

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