With Fewer Casinos, Atlantic City Gaming Profits Improve Even with Less Overall Revenue
Posted on: August 26, 2015, 01:47h.
Last updated on: August 26, 2015, 01:54h.
Atlantic City gaming may be losing, technically speaking, but the house is still winning overall.
The New Jersey beachside resort isn’t packing in the tourists in the same way that it once did, but the news isn’t all bad for those casinos that have decided to stick it out.
The eight remaining resorts in Atlantic City have seen their revenues and profits rise through the first half of 2015, even as the overall market for gambling in Atlantic City seems to be shrinking.
According to the New Jersey Division of Gaming Enforcement, revenue for the casinos that are still operating was up 3.5 percent over the first six months of the year compared to the same period in 2014, despite the fact that overall revenues are down 11.8 percent.
The difference comes from the fact that there were still 11 casinos open through the end of last June, making a true apples-to-apples comparison of the two markets difficult.
Fewer Casinos Dividing Smaller Market
Still, the overall trend seems to be clear. While the overall size of the Atlantic City market has shrunk, the fact that four casinos closed in the city last year meant that the average revenue per casino went up, creating a very profitable situation for those properties able to survive the wave of closures.
In fact, year-over-year gross operating profits rose more than 27 percent year-over-year, with the eight casinos making $213 million between them so far in 2015. Even after accounting for taxes and other obligations, the casinos are making more money than in 2014.
In fact, seven of the eight casinos have seen their profits increase this year. The biggest winner has been the Borgata Casino Hotel, which saw its net revenues pump up by nearly $25 million through June.
But the most impressive result may have come from the Golden Nugget. Over the past year, the Nugget has been performing well in both its live and online operations, and managed a $7.7 million operating profit in the first half of 2015, representing a whopping 902 percent increase over the $776,000 it made during the same period last year.
Trump Taj Mahal Struggles with Bankruptcy, Union Relations
However, one casino has not enjoyed the windfall that the rest of the city is experiencing. That distinction belongs to the Trump Taj Mahal, the beleaguered resort that is currently going through bankruptcy proceedings and that nearly became the fifth casino to close last year.
Apparently, the name “Trump” doesn’t have the magical powers in a casino that its namesake presidential candidate has demonstrated in the GOP run off so far. Although things have not always been thus.
In 2014, the Trump Taj Mahal wasn’t exactly breaking the bank, but it was profitable. It took in $1.8 million in profits over the first six months of the year. But the turmoil over the property seems to have taken a toll, as the Taj Mahal lost more than $900,000 in the first half of 2015.
The Taj Mahal has more trouble brewing this week, as the union that represents most of its casino workers is threatening a strike against the resort. The union, Local 54 of Unite-HERE, has been fighting for the restoration of health and pension benefits that the casino was able to take away from workers during bankruptcy proceedings last October.
The casino is operated by Trump Entertainment Resorts, a firm that is in the process of being purchased by billionaire Carl Icahn. An appeals court is expected to rule on whether the union workers should have their benefits resorted, though Icahn has threatened to shut down the Taj Mahal if the court rules in the union’s favor.
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