On August 28th, 2008, Atlantic City casinos continued to suffer because of increasing competition and increasing gasoline prices. The city's eleven casinos lost around $39.4 million in the 2nd quarter, compared to a profit of $34.8 million in the 2nd quarter of 2007. It was the 3rd consecutive quarterly loss for the casinos.
The balance sheets of the casinos were not much better when measuring gross operating revenues, which is considered better between casino establishments. It does not include interest, taxes, depreciation and other miscellaneous charges. Gross operating profit for the quarter ending June 30th dropped by 16.5% to $247.3 million from the same period last year, according to the figures released by the state Casino Control Commission. It was the 6th consecutive quarter in which gross operating profit dropped. Quarterly net revenue slide down to 3.3% to $1.15 billion.
Dennis M. Farrell Jr. of Wachovia Capital Market said that what will happen is it's going to be survival of the fittest in the short term. He added that competition for customers is going to be more aggressive compared in the past. Only one casino facility, Harrah's Resort Atlantic City, posted a gain in quarterly gross operating profit, as it finished a waterfront expansion that added nine hundred sixty hotel rooms and casino space, together with new restaurants and retail shops to their facility. Gross operating profit at Harrah's improved by 18.7% to $43.3 million from the 2nd quarter in 2007.
The New Jersey casino industry is heading into its 2nd year of dropping revenue as the seaside gaming facilities have been affected by the new slot parlors in New York and Pennsylvania, rising gasoline prices and a smoking ban that will be expanded this fall. The biggest drop in quarterly gross operating profits were posted by the Atlantic City Hilton, down by 51.3% to $4.2 million and the Tropicana Casino and Resort, which is looking for a buyer, down by 47.6% to $16.1 million.
Quarterly gross operating profits at Resorts Atlantic City dropped by 39.3% to $3.6 million, dropped by 30.8% to $20.4 million at the Showboat Casino and hotel; dropped by 25.8% to $6.7 million at Trump Marina Hotel Casino, dropped by 22.7% to $36.1 million at Caesars Atlantic City Hotel Casino; dropped by 16.6% to $46.2 million at Borgata Hotel Casino and Spa; dropped by 7.2% to $9.2 million at Trump Plaza Hotel and Casino; dropped by 5.2% to $35 million at Bally's Atlantic City and dropped by 1.4% to $26.4 million at Trump Taj Mahal Casino Resort.
For the first 6 months of the year, gross operating profits for the Atlantic City's casinos dropped by 17.1% to $491.1 million, while net profits dropped by four percent to $2.26 billion compared to the first half of 2007.
09/17/2008 07:57 PM