Third-quarter results show Atlantic City casinos still struggling
Net income at Atlantic City's 11 casinos rose 3.6 percent in the third quarter, reversing two consecutive quarterly drops, but other indicators showed the industry continued to struggle amid fresh competition.
Net income at Atlantic City's 11 casinos rose 3.6 percent in the third quarter, reversing two consecutive quarterly drops, but other indicators showed the industry continued to struggle amid fresh competition.
Net revenues fell 3.8 percent and gross operating profit dropped 0.6 percent in the quarter for the seaside gambling halls, which have been hurt by new slot parlors in New York and Pennsylvania.
The figures today from the state Casino Control Commission make it clear that 2007 will be the first year that revenues fell since casino gambling started in Atlantic City in 1978.
Gross operating profit, which excludes interest, taxes, depreciation and other charges, is considered a better comparison between casino properties than net income.
The 11 casinos had gross operating profit of $416.2 million for the three months ending Sept. 30, compared to $418.8 million for the same period in 2006.
The 2006 numbers include those from the smallest property, the Sands Hotel & Casino, which closed Nov. 10, 2006, to make way for a larger casino hotel.
Net revenue, which does not include the value of some perks given patrons, fell to $1.34 billion for the quarter. Net income was $140.3 million, compared to $135.5 million a year ago.
Five of the 11 casinos saw declines in gross operating profit from the summer quarter a year ago, with the Trump Marina Hotel Casino registering the largest drop, 40.5 percent, to $11.8 million.
The other gambling halls whose gross operating profits failed to keep pace with last summer were the Atlantic City Hilton, down 25.3 percent, to $12.3 million; Resorts Atlantic City, down 22.2 percent, to $8.8 million; Bally's Atlantic City, down 14.7 percent, to $53.8 million; and Tropicana Casino and Resort, down 8.6 percent, to $39.4 million.
Quarterly gross operating profit for the remaining properties, compared to the third quarter of 2006: Trump Plaza Hotel & Casino, up 31.6 percent, to $19.5 million; Caesars Atlantic City Hotel Casino, up 12.5 percent, to $65.9 million; Trump Taj Mahal Casino Resort, up 9.3 percent, to $41 million; Borgata Hotel Casino & Spa, up 2.5 percent to $73.2 million; Showboat Casino-Hotel, up 2.3 percent, to $37.4 million; and Harrah's Atlantic City, up 2.1 percent, to $53 million.
For the first nine months of 2007, the 11 casinos had gross operating profit of just over $1 billion, down 8.1 percent from the same period in 2006. Nine-month net revenue of $3.7 billion was down 4.3 percent, while net income of $238.9 million declined 22.2 percent.