Making the News

Press of Atlantic City

Originally Published:Friday, June 11, 2010
http://www.pressofatlanticcity.com/news/breaking/article_9fe1d0e4-74f0-11df-bbb0-001cc4c03286.html

Despite a good Memorial Day, revenue falls short of casinos' expectations for May

By Donald Wittkowski
Press of Atlantic City

ATLANTIC CITY — Hotel rooms were booked, restaurants were crowded, shows were sold out and the weather was glorious. For the casinos, a blockbuster Memorial Day weekend seemed the perfect climax for what many had hoped would be a strong May.

But it just didn’t happen.

Casino revenue fell 9 percent in May despite what gaming executives described as one of the best Memorial Day holiday weekends in recent memory. Altogether, the 11 casino hotels won $319.7 million from the slot machines and table games, compared to $351.3 million for the same month a year ago, the New Jersey Casino Control Commission reported Thursday.

“We’re clearly disappointed. May was just not a great month,” said Don Marrandino, president of the Bally’s, Caesars, Harrah’s Resort and Showboat casinos owned by Harrah’s Entertainment Inc.

May’s results ended the momentum that started in April, when casino revenue almost hit the break-even point. With May being down, the gaming industry has suffered 21 straight months of revenue declines. The last increase was August 2008.

“It’s hard to look at the box score the next day and say we feel good about it,” Marrandino said, using a sports term to describe May’s setback.

Every casino was down in May. Declines ranged from nearly 21 percent at the Atlantic City Hilton Casino Resort to 4.9 percent at Borgata Hotel Casino & Spa. Borgata held its usual position as the top-grossing casino, raking in $59.2 million in revenue for the month.

For the first five months this year, revenue has declined 7.9 percent, to $1.49 billion. Atlantic City is on track for the fourth straight year of lower revenue.

May is usually a harbinger for the peak summer tourist season. Gaming analyst Harvey Perkins said the revenue decline is not a good sign for summer and suggests that customers are “rejecting” Atlantic City in favor of other casino markets.

“May was an ideal month to see improvements. There were five weekends, the Memorial Day holiday and great weather. Unfortunately, we still saw a 9 percent decline,” said Perkins, senior vice president of Spectrum Gaming Group, a casino consulting firm based in Linwood.

Marrandino said despite the decline in casino winnings, nongaming revenue from such things as hotel rooms, food and beverage and entertainment has been climbing and should maintain its upward trend through the summer.

“Bookings are up, rates are up, shows are booked. So if you look at the summer, it is good,” Marrandino said. “Every business guy I talk to says their business is up.”

The release of May’s revenue figures coincided with the announcement of more disappointing news for Atlantic City. The Pennsylvania Gaming Control Board said Pennsylvania’s nine casinos, which are Atlantic City’s chief rival, will start testing new table games in July.

Plans call for having table games go live at three western Pennsylvania casinos beginning July 8 if there are no problems during the tests. The remaining six casinos will bring their table games online between July 13 and July 18 following their tests.

Perkins said the additional competition from Pennsylvania, combined with new table games at Delaware’s three racetrack casinos, will be something that Atlantic City must confront “head-on”

Contact Donald Wittkowski:

609-272-7258

[email protected]

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