ATLANTIC CITY — Casinos posted higher gaming revenue in December, marking the first time in 40 months the local industry has moved upward.
Gaming officials immediately hailed December’s results as an indication that Atlantic City may finally have bottomed out following an unprecedented downturn in the nation’s second-largest casino market.
“The positive win results are an encouraging sign of economic recovery for Atlantic City casinos,” said David Rebuck, director of the New Jersey Division of Gaming Enforcement. “This is an exciting time for Atlantic City as we see more visitors enjoying the casinos and the wide array of attractions.”
Year-end figures released by Rebuck’s office Tuesday showed that the 11 casino hotels took in $246.5 million in revenue from slot machines and table games in December, a 4 percent increase compared to the same month a year ago. Slot winnings were up 8 percent at $174.1 million, while table game revenue fell 4 percent to $72.5 million.
December’s mild weather, almost spring-like at times, drew throngs of gamblers to the resort and contributed to a blockbuster New Year's Eve weekend featuring sold-out hotel rooms and extravagant high-roller parties; it was clearly a major factor for this December’s uptick. It contrasted with December 2010, when a blizzard smothered Atlantic City with more than 20 inches of snow Dec. 26.
Overall, though, gaming revenue fell for the fifth straight year in 2011, illustrating that Atlantic City continues to be hurt by the sluggish economy and casino competition in surrounding states.
For the entire year, the casinos won $3.3 billion from gamblers, a 7 percent decline from $3.6 billion in 2010 and well under the market’s 2006 peak of $5.2 billion.
Propelled by an exceptionally strong December, Borgata Hotel Casino & Spa, Atlantic City’s market leader, was the only gaming hall to finish 2011 with higher revenue than in 2010, although Resorts Casino Hotel was down only slightly. Borgata inched up for the year to post $651.8 million in revenue. For December, Borgata was up 19 percent, second only to a 23 percent revenue gain by Resorts over the same month a year ago.
“From Christmas to New Year’s weekend, I think it was a strong last week,” said Joe Lupo, Borgata’s senior vice president of operations.
Lupo declined to discuss the specific reasons for Borgata’s improved performance for the entire year, saying only that he was pleased with the results and hoped they would continue through 2012.
Atlantic City’s last monthly revenue increase was in August 2008, followed by 39 straight months of declines. Rebuck noted that December’s 4 percent growth was the biggest monthly increase since the 7 percent gain in December 2006.
“I think it’s a positive sign,” Tony Rodio, president and chief executive officer of Tropicana Casino and Resort, said of December’s increase. “The only caveat is that we have to be a little realistic. There was very bad weather after Christmas (in 2010) that affected us for two or three days.”
Rodio characterized December’s results as the beginning of a recovery. He predicted there will be more increases this year, particularly after the $2.4 billion Revel megaresort opens in the spring to give Atlantic City its first new casino since 2003.
“I think we have seen the declines in Atlantic City slowing down,” Rodio said. “Are we going to have increases month after month? No. But I think we’re going to see increases sprinkled in, especially with Revel coming up. This is very positive. It’s a sign of better things to come.”
However, some gaming analysts remain pessimistic. A research report released last month by PricewaterhouseCoopers LLC predicted that Atlantic City gaming revenue will continue to fall through 2015, eventually settling at $2.8 billion annually.
While Atlantic City’s fortunes have sagged, Pennsylvania continues to enjoy robust growth. Pennsylvania is on the brink of overtaking Atlantic City this year as the nation’s second-largest casino market, analyst Andrew Zarnett, of Deutsche Bank, said in a newly released research report.
“Our view of continued declines (for Atlantic City) into 2012 remains intact as Pennsylvania supply continues to grow and existing casinos ramp up marketing efforts and undergo expansions to lure the day-tripper away from Atlantic City,” Zarnett wrote. “With a recession well under way and unemployment high, we think Pennsylvania casinos will have the upper hand versus Atlantic City.”
Pennsylvania, on an annual basis, has already surpassed Atlantic City in slots revenue. Pennsylvania’s 10 casinos ended 2011 with $2.4 billion in slots revenue, compared to $2.34 billion for Atlantic City.
Table games have given Atlantic City an overall revenue edge so far. Atlantic City had $974.7 million in table games revenue in 2011. Pennsylvania has been rapidly closing the gap, though. Pennsylvania will not release its final table games figures for 2011 until later this month.
Contact Donald Wittkowski: