Casinos report June revenue decline

Any remaining hope that the gambling industry was recession-proof disappeared yesterday as last month's revenue numbers for Atlantic City's 11 casinos slumped.

Total revenue for the country's No. 2 gaming market was $373.6 million, an 11 percent decrease from $419.8 million in June 2007.

Data from the New Jersey Casino Control Commission were particularly worrisome for the resort's gambling operators because June represents the first full month of their peak season and is a good barometer of how they will do the rest of the summer.

Ten of the resort's 11 casinos reported revenue declines, ranging from 0.3 percent at the Borgata Hotel Casino & Spa, to 23 percent at Trump Marina.

Slots revenue decreased 12.2 percent, while table games revenue slid 8 percent.

"Ugly, that's the only way to put it," said Andrew Zarnett, gambling analyst with Deutsche Bank AG of New York. "The American consumer is getting hit hard by higher energy prices, by higher food prices, and is being affected by overall uncertainty in the economy.

"Discretionary dollars are significantly less," he said, "and gaming is feeling the impact. It's really bad."

The numbers were so uncharacteristic of Atlantic City in the summertime that even the head of the resort's chief marketing agency issued an unsolicited statement.

"This is a tough economy in an increasingly competitive tourism marketplace," said Jeffrey Vasser, executive director of the Atlantic City Convention and Visitors Authority. "We are a full service, distinct destination that continues to have a bright future. Despite the gaming revenue decline, Atlantic City remains one of the top destinations in the country."

Business has been just as bad in Las Vegas. The nation's largest gambling market reported its steepest monthly revenue decline in May of 16.4 percent. That was the lowest monthly take for the Las Vegas Strip since January 2002, after the terrorist attacks on Sept. 11, 2001, crippled the travel industry.

For Atlantic City, new slots competition from Pennsylvania is partly to blame. The seven operating slots parlors generated $135.5 million in June, according to the Pennsylvania Gaming Control Board.

Among Atlantic City's casinos, only Harrah's Resort, which recently opened a 963-room hotel tower and upscale retail mall, reported a 5.5 percent revenue increase.

Analyst Zarnett said the market was yet to see the worst. A comprehensive casino smoking ban, signed into law in May, takes effect in Atlantic City on Oct. 15.

"The timing of the smoking ban could not come at a worse time," Zarnett said. "At a time when Atlantic City casinos are feeling the full impact from a consumer recession, a 100-percent full smoking ban will further lead to significant revenue declines."