Atlantic City Revenue Down Again in June
Revenue news out of Atlantic City is beginning to sound to some like a broken record, and unfortunately it’s not the kind of record breaking that anyone likes to dwell upon.
Again in June, the numbers took a dip over the same period last year. More specifically, revenue was down 10.7 percent from June of 2012, to $240.2 million, continuing a 2013 trend that has seen similar deterioration month after month.
Most dismal year is over two decades
According to a report in Businessweek, 2013 is on track to be the worst year for the struggling New Jersey gaming mecca in over two decades – since 1991. In fact, revenue in Atlantic City has declined every consecutive year for the past six, from a record year in 2006 which saw the city’s dozen casinos take in $5.2 billion. By contrast, only $3 billion went into the casinos’ coffers in 2012.
Much of the blame for Atlantic City’s current economic situation is being placed on pressure from neighboring states, in particular Pennsylvania, where new casino properties have continued to attract patrons that would have previously been visiting Atlantic City. Last year, Pennsylvania usurped Atlantic City to become the nation’s second-largest gambling market behind Nevada.
Many in New Jersey are pinning their hopes on online gambling as a means of turning around Atlantic City’s continued slide. In February New Jersey became the third state in the country to legalize some form of online wagering when Republican Governor Chris Christie signed the state’s online gambling law, which will require the nascent Internet gambling industry to be based in Atlantic City.
Atlantic Club pleased with recent performance
Among the twelve casino properties in Atlantic City, there is one that is not bemoaning the current fiscal cloud hanging over the seaside resort town.
That casino is the locals-only property the Atlantic Club Casino Hotel, which has made headlines in recent months as it entered into and then exited from an agreement to be purchased by the parent company of the world’s largest online poker site, PokerStars, a subsidiary of Isle of Man-based the Rational Group.
The deal, over which the two companies had been in negotiations since late last year, fell apart this past spring when the Atlantic Club terminated the deal despite the fact that the Rational Group had already fronted the ailing casino $11 million toward a total $15 million purchase price. PokerStars sued to protect the deal, however a judge found in favor of the Atlantic Club, permitting the once-successful casino to keep the $11 million it had received in advance in accordance with the purchase contract.
In June, the Atlantic Club’s revenue was down 4.8 percent over the same period of last year.
After June’s revenue numbers were made public, the chief operating officer of the Atlantic Club, Michael Frawley, was quoted as saying, “We are extremely pleased with June’s performance. The Atlantic Club continues to significantly outperform the Atlantic City market and our prior-year profitability numbers. The ‘best deal’ in Atlantic City continues to resonate with our guests and our year-to-date results are clear evidence of that.”
On the heels of its courtroom defeat in the Atlantic Club case, news broke earlier this month that PokerStars has inked a partnership for New Jersey online gambling with Resorts, Inc., the operator of Atlantic City’s oldest land-based casino.
Comprehensive Internet gaming sites are expected to be up and running there later on this fall. Both companies will need to be approved by New Jersey gaming officials before they will be licensed to operate real-money betting sites.
