Mammoth Blog

Revenue at Atlantic City's eleven casinos dropped by 9.9 percent to $346.2 million in October from a year ago as the national economic downturn deepened the gambling industry's woes, officials said on Monday.

The decline follows a 15.1 percent plunge in September, the biggest overall fall in gaming revenues in the 30-year history of New Jersey's gambling capital, according to the state's Casino Control Commission.

"Win," or revenue, from slot machines was $235.9 million while that from table games was $110.3 million.

For the first 10 months of 2008, revenue dropped by 6.6 percent from a year earlier; revenue from slots fell 8.6 percent and dropped 2 percent from table gaming.

The latest monthly revenue compares with a historic high of $427.9 million in October 2005.

Across the U.S., the gambling industry is facing a wave of losses or bankruptcies as it struggles to overcome lower spending by casino clients.

On Nov. 7, Trump Entertainment posted a third-quarter loss of $139.1 million, or $4.39 per share compared with a profit of $6.6 million, or 21 cents a share in the year-ago period. Shares in Las Vegas Sands, which last year opened the world's largest casino in Macau, halved in value last week after its auditor expressed doubts about its financial health. Tropicana Entertainment has filed for bankruptcy in the last year.

Carlos Tolosa, president of the eastern division of the Harrah's casino chain, with four casinos in Atlantic City, said the decline, though less dramatic than September's, did not represent any significant improvement.

"These are dismal numbers," Tolosa told reporters. "I think we are in for some tough times ahead."

Harrah's, the world's biggest gaming operator with seven Las Vegas casinos, last week reported a third-quarter net loss of $129.7 million compared with a profit of $244.4 million a year earlier.

Tolosa blamed the slowing economy and competition from slots parlors in nearby Pennsylvania for the latest revenue drop.

He said performance was further damaged by the state's implementation of a complete smoking ban in the second half of October. Revenue from slot machines was down 12 percent in the first half, deepening to 20 percent in the second half of the month, he said.

Tolosa predicted revenue for 2008 as a whole would likely be down 7.5 percent to 8 percent across Atlantic City and that he is likely to add to the 1,200 job losses that Harrah's has made so far this year if current conditions continue.

"There's a high likelihood that more adjustments will be needed," he said. "I believe softness will continue into 2009, and we are in for a few months of a very rough ride here."

Mark Juliano, chief executive of Trump Entertainment Resorts Inc., which owns the Trump Taj Mahal casino, told Reuters he expected some improvement in revenue when the smoking ban is rolled back to 75 percent of casino floors starting on Nov. 15 for at least a year.

Falling gasoline prices should also help revenue going forward but the year as a whole will be down, Juliano predicted. "It's going to be a challenging close to the year," he said.

The biggest revenue decline, 29.3 percent, was seen at the Trump Marina casino, followed by Resorts with a 28.7 percent drop and the AC Hilton where revenue was down 21.4 percent. source>>>