Atlantic City Profits Down 27 Percent in 2012
(Associated Press) - Atlantic City's casinos saw their profit fall by more than 27 percent last year, even as revenue from non-gambling sources inched upward.
The city's casinos collectively posted $360 million in gross operating profits in 2012. They were hurt by having to close for up to a week for Superstorm Sandy.
Eight of the 12 casinos posted yearly profits, led by Harrah's Resort Atlantic City, with nearly $127 million, a nearly 13 percent increase from a year earlier. The Borgata Hotel Casino & Spa was next at just under $120 million, but that figure represented a decline of more than 26 percent from 2011.
Caesars Atlantic City saw a profit of $82.8 million, down more than 5 percent from 2011; Bally's Atlantic City saw a profit of $61.2 million, up more than 25 percent, and the Showboat Casino Hotel had a profit of $47.1 million, down 2.6 percent.
The Trump Taj Mahal Casino Resort saw a profit of just under $44 million, down more than 20 percent from 2011; the Tropicana Casino and Resort saw a profit of just under $18 million, up 2 percent, and Trump Plaza, which was recently sold to a California company, saw a profit of just under $10 million, an increase from their 2011 year-end profit of $2.6 million.
Revel, which is in bankruptcy court, posted a $110 million operating loss from its April 2 opening through the end of the year.
Other casinos which posted losses included The Atlantic Club Casino Hotel, which is in the process of being bought by the PokerStars online gambling company, with a loss of more than $19 million for the year. The Golden Nugget Atlantic City posted an $11 million loss, compared with a much smaller operating loss of $2.2 million in 2011, and Resorts Casino Hotel posted a $7.7 million loss, but that was an improvement of more than 36 percent from the $12.2 million loss it posted in 2011.
The Atlantic City casinos are in the seventh year of a revenue decline that began shortly after the first casino opened in neighboring Pennsylvania and New York.
Superstorm Sandy, which came ashore just north of Atlantic City on Oct. 29, affected the casinos' fourth-quarter earnings. Casinos closed for between five to seven days due to the storm.
And even though they were barely hurt by wind and flooding, the casinos continue to suffer to this day from lower revenue, due in part to the fact that hundreds of thousands of homes in some of their main markets in New Jersey and New York were seriously damaged by the storm, leaving their occupants homeless or with no disposable money to spent at casinos.
For the fourth quarter, the casinos posted a collective $18 million loss, compared with an operating profit of $81 million in the last three months of 2011.
Gross operating profit reflects earnings before interest, taxes, depreciation, and other charges, and is a widely-accepted measure of profitability in the casino industry.
The casinos' revenue from non-gambling sources increased by just under 3 percent for the year.
The casinos made $519 million from renting hotel rooms, up 2.2 percent; $551 million on food and beverage sales, roughly the same as last year, and $193 million on entertainment and other revenues such as spa treatments, casino-owned retail sales and rental income, up more than 15 percent for the year.
For the first time, the New Jersey Division of Gaming Enforcement added non-gambling revenues to its year-end statistics to give what it says is a more complete picture of the casinos' financial performance. But that also had the effect of raising the casinos' total revenue figure to $4.3 billion for the year, instead of the just over $3 billion in gambling revenue they won last year.
Businesses that lease space within the Atlantic City casinos reported a 39 percent increase in sales for 2012, to $246 million.
Occupied hotel room nights exceeded 5.2 million, a new annual high and an increase of 2.6 percent from 2011.
Revel had the priciest hotel rooms, with an average rate per occupied room of $161; the Borgata was next at $132. The Atlantic Club had the cheapest rooms, averaging less than $66. The city's average room rate was just under $100 for the year.
