ATLANTIC CITY — Casinos thought they had a winning combination when simulcast betting was introduced in 1993.
Simulcasting attracted horse-racing enthusiasts to Atlantic City and also created another gambling option for people who were already in the casinos playing the slot machines and table games.
But these days, an aging customer base and the declining horse-racing industry threaten the simulcast parlors. Tropicana Casino and Resort became the latest gaming hall to get out of the simulcast business when it closed its parlor Jan. 15, costing nine workers their jobs.
“For us, we ran a very, very small operation. The room itself began to lose money last year,” Tropicana President Mark Giannantonio said. “I want to focus our efforts on profitable sources of revenue. It’s just that simple.”
Giannantonio declined to disclose how much money Tropicana lost. Figures compiled by the New Jersey Casino Control Commission show that simulcasting generated nearly $569,000 in gross revenue for Tropicana in 2009, well below the casino’s historic high of $1.6 million in 2000. Gross revenue, which is not the same as profit, does not include the expenses casinos pay to run their simulcast facilities.
With Tropicana ending its operations, only six of the 11 casinos currently have simulcasting. Resorts Atlantic City, the Atlantic City Hilton Casino Resort, Trump Plaza Hotel and Casino and Trump Marina Hotel Casino also have no simulcast rooms.
Altogether, the casino industry grossed $7.2 million from simulcasting in 2009. Although that figure was up significantly from the $4.9 million in simulcast revenue for 2008, it was nowhere near the industry’s high of $12.5 million in 1998. Before 2009, simulcast revenue had declined four years in a row.
Simulcasting allows casino customers to bet on horse races broadcast from tracks across the country. Casinos get a cut of the betting action.
Don Marrandino, president of the Bally’s, Caesars, Harrah’s Resort and Showboat casinos owned by Harrah’s Entertainment Inc., said simulcasting doesn’t bring in a lot of money, but it is part of the overall “gambling experience” offered by Atlantic City’s resort-style properties.
“I view it as an amenity. It’s not big dollars, but we believe in continuing to run it,” Marrandino said.
There are five simulcast parlors within the four Harrah’s Entertainment casinos, including two at Bally’s. As a group, they generated $3.2 million in total revenue for Harrah’s Entertainment last year, down 12 percent from 2008, the company said.
Among individual casinos, Borgata Hotel Casino & Spa dominates simulcasting in Atlantic City, pulling in $2.7 million in revenue in 2009. Bally’s was second, with nearly $1.3 million in simulcast revenue. No other casino brought in more than $1 million. Borgata nearly tripled the size of its simulcast parlor when it expanded its casino in 2006.
The waning popularity of simulcasting in Atlantic City mirrors the declining interest in horse racing nationwide, according to Jim Wortman, gaming director at the Conrad N. Hilton College of Hotel and Restaurant Management at the University of Houston.
“I think all of us know that horse racing and dog racing are in trouble across the United States,” Wortman said. “Most people in our current society are unwilling to spend 45 minutes at a racetrack waiting for a 2-minute race and another 45 minutes waiting for another
2-minute race. That’s why casinos put in simulcasting, to bring in races from across the country without the waiting.”
There was another, less publicized reason the gaming industry wanted simulcasting. It allowed casinos to cram new table games into simulcast areas and free up other valuable floor space for more slot machines. In effect, simulcasting was a way for casinos to bypass state-imposed size limits on gaming space.
“Simulcasting is the regulatory fudge factor,” said Joseph Weinert, senior vice president of Spectrum Gaming Group, a Linwood-based casino consulting firm.
Wortman, a former Atlantic City gaming executive, said casinos rushed into simulcasting in the 1990s because of competitive pressures.
“Everybody wants to do it the first time around, which is why everybody in the 1990s wanted simulcast,” he said.
However, many of the horse-racing enthusiasts who came to the casinos for simulcasting in the 1990s were part of the World War II generation and now are either old or have died, Wortman noted.
“The players who used to follow horses religiously ... can’t do that anymore,” he said. “They’re just not around anymore.”
In this age of “instant gratification,” the next generation of gamblers has gravitated to the fast-paced slot machines and table games, Wortman explained.
“When there are casinos that have slot machines and table games, why do I need to invest 41/2 hours of my day for supposed entertainment or to watch a horse race on television from upstate New York or New York City?” he asked rhetorically.
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