Borgata owner says Atlantic City casino market stable
The parent company of Borgata Hotel Casino & Spa boosted its 2015 earnings target for the Atlantic City property to $165 million from $160 million after a strong first quarter.
The parent company of Borgata Hotel Casino & Spa boosted its 2015 earnings target for the Atlantic City property to $165 million from $160 million after a strong first quarter.
Boyd Gaming Corp., of Las Vegas, on Thursday reported first-quarter net revenue for Borgata of $182.6 million, up 9 percent from $167.3 million in the same period a year ago. The market-leading casino's operating profit nearly doubled to $37.8 million from $20.5 million, thanks in part to a property tax benefit.
"The right-sizing of the [Atlantic City] market over the last 12 months has helped stabilize the operating environment in Atlantic City," Keith Smith, Boyd's president and chief executive, said on a conference call with analysts.
Four casinos were closed last year - in a long-delayed recognition of Atlantic City's massive market-share losses to neighboring states - putting thousands of people out of work.
"With eight properties, Atlantic City appears to have reached a level of supply that is appropriate for demand and the remaining properties are generally seeing better results," Smith said.
Boyd officials did not discuss Borgata's property-tax fight with Atlantic City, which owes Borgata $88.25 million from a 2014 settlement of earlier tax years. Borgata has sued the city to block it from borrowing money in the bond market to repay a $40 million loan from the state, while leaving Borgata hanging.
Boyd's chief financial officer, Josh Hirsberg, declined to discuss this year's property-tax bill.
"I don't think we're in a position to do that at this point," he said. "Until we get a better idea of what the rate is, which typically comes in the July-August time period, I don't think we want to go there."
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