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Turning the tables on slots

Aug 14, 2007 6:47 AM

Staff & wire reports

Continuing a trend that appears non-reversible, Atlantic City casinos saw gaming revenues decline in July compared to July 2006.

The 11 casinos won $469.6 million in July, down 2.3 percent compared with the same period last year. Slot revenue fell 5.1 percent to $328.2 million, while table game winnings were up 4.9 percent to $141.4 million, according to figures released by the New Jersey Casino Control Commission.

The numbers reflect a weak summer, usually the time of year that casinos rack up big profits. Moreover, it seems all but assured that the industry will suffer its first annual revenue decline since casino gambling began in Atlantic City in 1978.

"I think what this says for the summer and the rest of the year is, slot revenues will continue to be weak," said Dennis M. Farrell Jr., a gaming analyst for Wachovia Capital Markets.

Gaming revenue has dropped in six of the first seven months this year. Analysts had thought the casinos might post higher revenue this July because of an easy comparison to July 2006, when the industry was shut down for three days by a state budget crisis that forced New Jersey gaming inspectors off the job. The shutdown cost the casinos an estimated $50 million to $55 million in revenue.

But this year, the casinos are facing other obstacles. Newly opened slot parlors in Pennsylvania and New York have been drawing business away from Atlantic City. Gaming executives also have blamed the city’s partial casino smoking ban, which began in April, for driving away customers.

The vagaries of the calendar also hurt the casinos in July. Usually the Fourth of July provides a boost, but this year it fell on a Wednesday.

So far this year, revenue is down 3.7 percent overall to $2.91 billion. Slot revenue has tumbled 6.3 percent to $2.1 billion for the first seven months.

Farrell said one consolation is the relatively healthy table games revenue, which is up 3.3 percent to $847.9 million for the year. Slot parlors in surrounding states don’t offer table games.

"I think the table games business remains strong," Farrell said. "It continues to show the competitive advantage Atlantic City has over Pennsylvania, New York and Delaware."

Of Atlantic City’s 11 casinos, four posted revenue declines in July. Tropicana Casino and Resort, reeling from mass layoffs and a management shake-up by new owner Columbia Sussex Corp., had the biggest revenue decrease at 11.4 percent.

Tropicana was the only casino in July to suffer double-digit declines in both slot and table game revenue. Courtney Birmingham, a Tropicana spokeswoman, said the casino would not comment on its financial performance.

Borgata Hotel Casino & Spa led the industry in July with $70.6 million in revenue, but the figure was down 3.7 percent compared with last year. Borgata’s slot winnings fell 6.5 percent and its table games revenue was up only fractionally.

Posting the biggest gain was Resorts Atlantic City, which benefited from strong table games play to end the month up 10.5 percent. Caesars Atlantic City was just behind Resorts with a 9.6 percent increase in revenue.