Making the News

Press of Atlantic City

Originally Published:Thursday, December 4, 2008
http://www.pressofatlanticcity.com/186/story/335433.html
"I'm certain they're cutting more than payroll," said Harvey Perkins, a senior vice president with Spectrum Gaming Group, a Linwood-based casino consulting firm. "They're most likely taking a hard look at everything they do in deciding what is nice versus what is necessary in all areas. It's a difficult process, not only for the leadership of the company, but also equally difficult to accept for the employees."

Perkins said the consumer spending crunch and fierce competition from slot parlors in Pennsylvania have casinos scrambling to find ways to boost profits so they can pay their operating costs.

"It's really the effects of the economic downturn nationwide, along with growing competition regionally, that continue to create pressure on Atlantic City's operators to maintain acceptable levels of profitability to service their debt loads," he said.

Atlantic City casinos cut 1,000 jobs in November

By Donald Wittkowski
Press of Atlantic City

ATLANTIC CITY - Casino employment fell to its lowest level in 20 years last month as the gaming industry slashed nearly 1,000 jobs to offset declining revenue caused by the economic crisis and competition from Pennsylvania's slot parlors.

With the latest round of job cuts in November, the casino work force has shrunk to 39,137 employees, the first time since early 1988 it has dropped below 40,000. Employment peaked at 51,560 workers in July 1997, according to the New Jersey Casino Control Commission. The closing of the Sands Casino Hotel in 2006 cost 2,200 jobs.

Borgata Hotel Casino & Spa had the sharpest reduction in its work force in November, cutting 430 jobs in its first mass layoff since the Las Vegas-style megaresort opened in 2003.

Overall, the 11 casinos have chopped nearly 3,000 jobs during the past three months in response to Atlantic City's worst slump in its 30-year history of legalized gambling and to make seasonal adjustments in the work force. Gaming revenue has tumbled 6.6 percent to $3.9 billion in the first 10 months this year.

"We just don't know what will happen," Linda M. Kassekert, chair of the Casino Control Commission, said of the possibility of more layoffs to come. "Obviously, it has been a very tough fall going into a tougher winter, and we all know business tends to drop off after the holidays."

Kassekert said the commission is willing to consider regulatory reforms to help the industry, but noted that no casinos have made proposals yet. She also said she has talked to New Jersey Labor Commissioner David J. Socolow about state programs to retrain laid-off casino workers for new jobs.

"Certainly with this economy, even though unemployment is worse in other states, we don't want to see it rise anymore," Kassekert said.

At an appearance in Atlantic City on Wednesday, Gov. Jon S. Corzine said the casinos' plight underscores the urgency for a strong national economic-stimulus package "that stops this slide."

"I mean, we don't need to wait until there's a 30 percent decline in revenues and there's another series of layoffs in Atlantic City or in the financial services industry that undermine the overall health and well-being of the American people," Corzine told reporters after speaking at the Governor's Conference on Workforce and Economic Development.

Among the thousands of employees affected by the casino downturn is Ramona Karatas, who worked full time as a beverage server at Showboat Casino Hotel for almost four years, but has seen her hours cut.

Karatas said she went from earning $100 per day in tips to $25. Now the Galloway Township resident is receiving partial unemployment benefits.

"My situation changed when the whole country got screwed up," Karatas said Wednesday while waiting to speak with officials at a state unemployment office in Pleasantville. "I'm really upset, but there's not much I can do about it."

Karatas must check in every day to see if there is any work. She said Showboat has tried to help its workers, some of whom took voluntary layoffs. But she explained it will be a challenge this holiday season to help her two children and two grandchildren.

"It's going to be less of a Christmas," she said.

Labor is just one of the areas casinos are looking to cut. One gaming analyst said virtually everything is on the table.

"I'm certain they're cutting more than payroll," said Harvey Perkins, a senior vice president with Spectrum Gaming Group, a Linwood-based casino consulting firm. "They're most likely taking a hard look at everything they do in deciding what is nice versus what is necessary in all areas. It's a difficult process, not only for the leadership of the company, but also equally difficult to accept for the employees."

Perkins said the consumer spending crunch and fierce competition from slot parlors in Pennsylvania have casinos scrambling to find ways to boost profits so they can pay their operating costs.

"It's really the effects of the economic downturn nationwide, along with growing competition regionally, that continue to create pressure on Atlantic City's operators to maintain acceptable levels of profitability to service their debt loads," he said.

Trump Entertainment Resorts Inc. announced Monday it missed a $53.1 million bond interest payment and is in negotiations with lenders to restructure $1.25 billion of corporate debt. Resorts Atlantic City disclosed last month that it failed to make a monthly interest payment and is talking with its lender to resolve the problem.

Perkins predicted that as many as five casinos could undergo a financial restructuring, with bankruptcy a possibility. He said Trump Taj Mahal Casino Resort and Trump Plaza Hotel Casino may have to be restructured even if the company completes the proposed $270 million sale of weak sister Trump Marina Hotel Casino.

Tropicana Casino and Resort, which has been on the market since its troubled former owner was stripped of its gaming license last year, is expected to be auctioned off in U.S. Bankruptcy Court in coming months.

Resorts and sister property Atlantic City Hilton Casino Resort, both owned by Colony Capital LLC, also likely will have to be restructured following double-digit declines in revenue and profits at both gaming halls, Perkins said.

Staff writers John Froonjian and Derek Harper contributed to this report.

E-mail Donald Wittkowski:

DWittkowski@pressofac.com

 

 

 

 

Spectrum OSO Asia SPECTRUMETRIX  Spectrum-i 
© Copyright 2007-2017 - Spectrum Gaming Group. All Rights Reserved.

Spectrum Gaming Group • 1201 New Road, Suite 308 • Linwood, NJ 08221 • USA
Phone: 609.926.5100 • Fax: 609.926.5121 • info@spectrumgaming.com


Site Development and Hosting provided by
MasseyMedia