An unfavorable calendar, stormy weather, relentless competition and an economy that continues to be sluggish contributed to a more than 9 percent decline in July gambling winnings, casino executives said.
The Division of Gaming Enforcement released monthly revenue figures Friday showing gambling revenues sinking to $308 million in July, continuing a five year downward trend.
Despite the decline, some casino executives said the results were better than expected.
“I thought it would be a double-digit decline,” said Tony Rodio, president of the Tropicana Casino and Resort and head of the Casino Association of New Jersey. “I am, believe it or not, a little encouraged by the results.”
July was a down month for several casino markets across the country as it contained only four weekends — one less Friday and Saturday — when compared to the same month last year. Combining July’s figures with June, which would minimize the impact of the unfavorable calendar, Atlantic City’s gambling revenue sank only about 5 percent.
Every casino experienced a decline when compared to the same month last year. Bally’s Atlantic City and Trump Plaza experienced the largest overall drops of 30 and 26 percent respectively.
Borgata, which led the city in total casino wins at $54 million in July, saw a 16 percent drop in gross revenues year-over-year but a large part of that was due to $5 million the casino lost to a single patron playing mini-Baccarat over one weekend, according to Joe Lupo, senior vice president of operations.
“That is one of the biggest winnings from one customer we ever had,” he said. “We’re glad that we know where the aberration is that is causing the decline. And it’s such a singular event. That’s the business we’re in.”
Revel, a new casino resort that opened in April, saw its greatest increase in monthly gambling revenue so far this year, grossing nearly $18 million in July, an increase of more than 17 percent from last month.
However, two Wall Street analysts — John Kempf of RBC Capital Markets and Andrew Zarnett of Deutsche Bank — issued research notes calling the results disappointing, falling short of the $20 million mark analysts believe Revel needs to hit.
Still, Revel has started to increase its table games, which account for 36 percent of its total casino win, as opposed to Borgata where table games represent only a quarter of total win. Revel has taken longer to ratchet up slot play because it is difficult to lure away patrons who are loyal to other casinos where they may have amassed complimentary points, which reward them for their length of play, local casino analyst Roger Gros said.
“What you are trying to do is get players to change their casinos in the middle of the year,” he said. “You are asking them to start playing at Revel and give up all of those credits.”
In addition, four months’ worth of declining city gambling figures appears to have settled a debate on whether Revel is “cannibalizing” the customer base of other casinos.
“There is no doubt about it,” he said. “The market hasn’t grown and they have to get their numbers from somewhere.”
Casino executives gave several reasons for the overall revenue decreases, including pointing to widespread outages on June 30 that minimally affected Atlantic City casinos but may have driven away customers, said Don Marrandino, Caesars Entertainment eastern division president.
“It certainly hurt us,” he said. “A lot of people who would have been here left.”
Competition from neighboring states also remains strong, drawing “convenience” gamblers who don’t want to travel to Atlantic City. That, coupled with a strained economy, has made it difficult to compete on the casino floor.
At the same time, Atlantic City has the Boardwalk, hotel rooms and a wealth of nongambling attractions that aren’t reflected in gambling figures but bring in strong profits that help the economy, executives said.
“We need to take advantage of our physical assets,” Marrandino said. “You can make a profit by selling hotel rooms at good rates, and we’ve enjoyed good rates and strong demand. ... As gaming declines, we need to be more creative.”
Separate from monthly revenue figures, overall profitability figures, which include money made from nongambling amenities, are released only on a quarterly basis. The second quarter results are expected later this month.
Since 2007, only five months of gambling revenues during the last five years have shown any year-over-year increases. The last time monthly revenue rose was in December when it increased 4 percent year over year.
Prior to that, August 2008 was the last month to see an increase.
In the past, New Jersey has ranked second among states in terms of gambling revenue behind Nevada, but this year fell to third behind Pennsylvania.
Contact Hoa Nguyen:
Casino Win for July 2012, July 2011 and percentage increase/(decrease)
Atlantic Club 14,636,616 16,797,629 (12.9)
Bally's AC 28,198,190 40,269,555 (30.0)
Borgata 54,044,653 64,397,100 (16.1)
Caesars 36,949,877 37,674,277 (1.9)
Golden Nugget 13,174,586 13,579,411 (3.0)
Harrah's 39,023,914 45,745,056 (14.7)
Resorts 13,107,287 14,924,286 (12.2)
Revel 17,536,653 N/A N/A
Showboat 23,031,722 27,749,568 (17.0)
Tropicana 27,935,846 28,096,130 (0.6)
Trump Plaza 10,874,411 14,599,249 (25.5)
Trump Taj Mahal 29,736,056 36,618,546 (18.8)
Total $308,249,811 $340,450,807 (9.5)