Just a few weeks since New Jersey Governor Chris Christie finally approved an intrastate Internet gambling bill for his province, and the Atlantic City land casino business is not looking good. February revenue numbers are in and showing a 12.5 percent slide; given that January also showed a double-digit drop, that’s not making Christie look like a rocket scientist for putting his stamp of approval on gaming as the great savior of the state’s beleaguered coffers.
Even worse, slots revenues, which are every casino’s hard-working but ugly slaves, dropped 17.6 percent for the month, though the Division of Gaming Enforcement (DGE) said that was partly due to a $9.8 million reduction in promotional gaming credits wagered vs. the same time in 2012. Gaming credits are what lure gamblers into casinos, and they’re usually pretty effective, so what was keeping customers away? Moldy carpets? Less-than-top-shelf liquor service? Ugly cocktail waitresses? The DGE was less forthcoming in offering possible explanations for that one.
They’re also blaming the decline on 2012 having been a leap year, so this February had one less day. Not quite sure how that would account for 12.5 percent, but nice try, guys.
Up and Down
The biggest loser was Trump Plaza, which was recently sold for the lowest-ever Atlantic City yard sale price of just $20 million. Apparently you get what you pay for: Trump’s numbers were the absolute worst, at a 42 percent decline (ouch!) and a mere $5.2 million in revenues.
Bally’s Atlantic City also fared poorly with revenue declines in excess of 30 percent for February; they only took in $18.7 million. Also tanking were Showboat, down 27.4 percent to $14.6 million; Harrah’s Resort Atlantic City, down 23.3 percent to under $27.9 million, and Resorts Atlantic City, which tumbled 22.4 percent to $8.7 million.
Revel is getting ready to file a Chapter 11 bankruptcy petition this month, but ironically had better numbers than in January, even with a shorter month. February brought in $9 million to the city’s newest casino, compared to $7.9 million in January. Must be kind of like how you finally get pregnant when you stop trying.
Revel’s bankruptcy stems from a consistently poor performance overall since its opening a little less than a year ago, and apparently plans to go ahead with the filing remain in place. Termed a “pre-packaged” bankruptcy, the move will wash away about two-thirds of the casino’s $1.5 billion in debt by converting more than $1 billion of it into equity for lenders. Apparently, they have Rumplestiltskin locked in a tower suite, spinning straw into gold.
Gov. Christie, usually pretty quick with a retort, could only sigh and say, “I wish it was up 13 percent, but it’s not.” Well-said, guvner.
Christie’s standing behind his belief that the newly passed Internet gambling bill will kick casino tax collections up 85% in 2014, but the bill’s architect, New Jersey State Senator Ray Lesniak, says that’s simply unrealistic. “And I’m the main proponent of [the bill],” stated Lesniak. His doubts are echoed by Spectrum Gaming Group’s Gene Johnson, who said, “I’m not going to say that I understand the governor’s thought process [here].”
It’s called “wishful thinking.”