Atlantic City gambling revenue fell only fractionally in June compared to the same month a year ago, suggesting that the struggling casino industry may be on the brink of a summer turnaround.
Overall, the 12 casino hotels posted $274.7 million in revenue from their slot machines and table games, down just 0.6 percent from a year ago, according to figures released Tuesday by the New Jersey Division of Gaming Enforcement.
A friendly calendar helped push four casinos to revenue gains; the industry benefited from an extra Friday and Saturday this June compared to last year, although the ‘derecho’ storm did strike on June 29-30.
Tony Rodio, president and chief executive officer of Tropicana Casino and Resort, acknowledged the favorable calendar in June, but expressed optimism that summer is off to a reasonably good start.
“We have a better calendar, but it’s a big improvement than the double-digit declines over the last two months. I’m encouraged as we go into summer,” said Rodio, who also serves as president of the Casino Association of New Jersey, a trade group for Atlantic City casinos.
Rodio was especially pleased with Tropicana’s June performance. Tropicana led the local industry with a 38 percent increase in gambling revenue and posted its ninth straight month of higher slot winnings.
June represented the industry’s smallest monthly revenue decrease so far this year. Atlantic City continues to be hurt by the fragile economy and competition from casinos in surrounding states. Gambling revenue has declined nearly 7 percent overall through the first six months of 2012. December was the last month Atlantic City posted higher gambling revenue.
Revel, the city’s newest casino, is still struggling with its gambling business after its first 90 days of operation. The beach-themed resort had $14.9 million in gambling revenue in June, good for only eighth place among all casinos for the third straight month. Revel won just $13.4 million from gamblers in April and $13.9 million in May.
Revel CEO Kevin DeSanctis, however, said his casino has made progress on the nongambling side of its business as it continues to ramp up operations.
“There’s no question that we would prefer to have more gaming revenue,” DeSanctis said. “But one of the more interesting things from our perspective is that we have been able to generate significant, high-margin nongaming results.”
Revel’s business plan focuses more on attracting group business and overnight leisure customers instead of the day-tripping gamblers who traditionally have dominated the city’s casino scene.
“We’re really trying to change the dynamic in Atlantic City with our business model. We’re trying to attract a broader visitor,” DeSanctis said.
Revel had $8.5 million in nongambling revenue in June, excluding its entertainment operations. That represented a 25 percent increase compared to May. Revel also reported that the number of visitors was up 33 percent overall compared to May, including an 11 percent increase in hotel occupancy.
Revel also said business has been much stronger so far in July. Gambling revenue is up 75 percent versus the same period in June and there has been a 30 percent jump in its nongambling business. Revel also said July visitation is up 45 percent compared to June.
DeSanctis believes that Revel and the rest of the casinos in town should be helped throughout the summer by a number of marketing and promotional campaigns. The Atlantic City Alliance, a casino-funded marketing coalition, has spent $20 million for a “Do AC!” advertising blitz to attract visitors from the Northeast.
“I’m optimistic in what Atlantic City continues to do,” DeSanctis said. “Is it a turnaround? That’s hard to predict, but it should be a good summer.”
Among the rest of the casinos in June, Borgata Hotel Casino & Spa continued to hold the top spot in gambling revenue. Borgata took in $53.3 million from its slot machines and table games, although that represented a 6 percent decline compared to last year.
Tropicana posted $22.3 million in total gambling revenue in June. Other strong gainers included the Atlantic Club Casino Hotel, up nearly 14 percent, and Caesars Atlantic City, up nearly 8 percent.
Michael Frawley, Atlantic Club’s chief operating officer, said the casino’s new marketing strategy appears to be working. Atlantic Club, formerly known as the Atlantic City Hilton Casino Resort, is touting itself as an affordable casino offering low-stakes wagering, free parking and lower restaurant prices.
“We’ve been very aggressive in trying to get people to come here and try us out,” Frawley said. “We’ve gotten nothing but a positive response from it.”
Atlantic Club’s slot revenue jumped 25 percent in June, but the casino spent heavily on promotional offers to draw customers through the door. On the table games side, the Atlantic Club was down 32 percent.
Golden Nugget Atlantic City, which completed a $150 million property renovation this year, had a 4 percent increase in gambling revenue in June. Revenue was flat at Showboat Casino Hotel.
June’s worst performers included Trump Plaza Hotel and Casino, off 31 percent, and sister property Trump Taj Mahal Casino Resort, down 23 percent.
Bally’s Atlantic City saw its gambling revenue decline nearly 18 percent, while Harrah’s Resort was down 13 percent and Resorts Casino Hotel fell 7 percent.
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