Shutting down the Atlantic City casino industry for nearly four days contributed to a 20 percent freefall in October gambling revenues, according to the Division of Gaming Enforcement.
The industry won only $209 million in October, which was $52 million less than what was won during the same month last year. Even if the casinos had not been shut down due to Hurricane Sandy, gross gambling revenue likely would have seen a decline as it has trended for years, according to some officials. Since 2007, only six months of gambling revenues have shown any year-over-year increases.
“It’s a matter of perspective,” Tony Rodio, head of the Casino Association of New Jersey and chief executive officer of Tropicana Casino and Resort, said of October’s results. “I actually thought it would be worse.”
Hurricane Sandy struck Oct. 29 but forced the shutdown of the casinos one day earlier on Sunday, and likely affected the entire weekend’s gambling revenue, Rodio and other officials said. Even without the storm, October had one fewer weekend than the same month last year, which already put the industry at a disadvantage.
In the aftermath of the storm, Atlantic City continues to struggle as a tourist destination, particularly in countering the wrongful perception that the Boardwalk and casinos were damaged by Sandy — they weren’t — and that there are long lines for gas. Unlike other parts of the state, South Jersey has no shortage of operating gas stations and the rationing mandated in other parts of the state does not exist here.
Casino executives said they were concerned the perceptions might continue to persist into next year — calling it the “Sandy effect.”
“The question is how long does the Sandy effect last?” Rodio asked. “The sooner we can get back to normal, the sooner it is for people in the community and the state itself.”
Rodio said many of the people in northern New Jersey, New York and elsewhere who normally come to Atlantic City were hard hit by Sandy and that it may take until early next year for some of them to return. In the meantime, the resort needs to continue to better market itself and grow its nongambling offerings, which officials believe will lead to stronger profit margins even if gambling revenues continue to lag.
“The industry is not going anywhere and we have to continue to reinvent ourselves,” he said.
Revel, which opened its doors this year on March 28, posted its worst ever figures for a full month, reporting gambling wins of only about $9 million. When the casino held its public opening in April, monthly winnings totaled $13 million and reached a high of $20 million in August. Once in eighth place, its latest monthly gambling revenues placed it at 10th — ahead of Golden Nugget and Trump Plaza.
Revel Chief Executive Officer Kevin DeSanctis issued a statement to say the casino was using October to “recalibrate.”
“We made a decision to use October, typically a slower gaming month for Atlantic City, as a transition month to recalibrate our casino marketing efforts, including hiring a new senior vice president of marketing, so that we can elevate the experience for our gaming customers,” he said.
Among Atlantic City casinos in operation since last year, Golden Nugget was the only one to see a year-to-date increase in total wins. While the casino lags behind the pack when it comes to total gambling revenue — coming in second to last in October — Golden Nugget appeared to have been the least affected by the hurricane with the smallest drop in gambling revenue in October, down 4 percent when compared to the same month last year.
“As far as the Golden Nugget is concerned, we’re happy,” casino Vice President and General Manager Tom Pohlman said.
The Trump Taj Mahal took a sizeable loss in October with casino wins dropping 38 percent when compared to the same month last year. Table game wins there decreased by nearly 60 percent.
Don Marrandino, eastern division president of Caesars Entertainment, said during a conference call Friday that the loss of two major conventions due to the hurricane — the New Jersey Education Association and League of Municipalities — translated to about a $30 million loss to the city’s lodging, dining and entertainment sectors.
Occupancy rates at the four Caesars properties following the storm were less than 50 percent of normal, Marrandino said, and he hopes that next week will climb to 70 percent of normal. Rates for this weekend were up to 85 percent, partly due to the Carrie Underwood concert this weekend at Boardwalk Hall, he said.
In order to counter false perceptions about the damage to the city’s casinos, Marrandino said he spent all of Friday morning making the rounds on Philadelphia radio stations to spread the word that Atlantic City was open for business.
“The Boardwalk is up and running,” he said. “The city is running on full throttle.”
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