Atlantic City Cashes In With Record 2006
Last year unlucky gamblers found their wallets more than $5.2 billion lighter from casino losses. However, it marked the highest point for casino operators at the city by the shore, which has recorded year over year record revenues ever since the dice started rolling in 1978.
Casino winnings last year were four percent higher than in 2005, which totaled $5 billion, according to a New Jersey Casino Control Commission document obtained by onlinecasinocrawler.com. In context, the record year was more impressive since Sands shuttered its doors in November to make way for a new resort and the entire market was closed last year for three days during July. The shutdown cost the casinos about $50 million in winnings alone.
The biggest winner for the year was Borgata which alone pulled in $739.3 million, a five percent jump from the $704.4 million the resort earned in 2005. In July the property added more casino space, which accounted for some of the growth. Trump Plaza was the only loser among casinos still open as the resort’s gaming revenues fell nearly one percent to $300.9 million. It’s speculated Trump Plaza will be the next hotel to see implosion and be replaced by a new casino.
According to Bear Sterns gross gaming revenues increased 7.2 percent in December alone to $415 million. Slot revenues increased 9.3% year over year while table games pulled in just 1.7% more though people dropped 8.9% in cash during December.
But while it’s expected the city will see considerably more growth when as many as four new properties debut during the next five years, a no smoking law could damage future profits.
"This is going to be a very challenging year for Atlantic City," Joe Weinert, a consultant with Spectrum Gaming Group told The Street.
A study commission by the Casino Association of New Jersey says the city could see as much as 20 percent of its business evaporate from the change. Slot machines began operating late last year in neighboring Pennsylvania and two casinos will open in Philadelphia within three years. Philadelphia is just an hour’s drive from Atlantic City and has been a major feeder market for the resort town. Twenty five percent of Atlantic City’s visitors come from Pennsylvania, 10 percent from Philadelphia alone. Delaware, which is also adjacent to New Jersey also allows slot machines. Slot machines accounted for $3.8 billion of Atlantic City’s $5,018,300 in 2006 profits.
“Economically, it will certainly have an impact,” Cory H. Morowitz of Morowitz told the Press of Atlantic City Gaming Advisors LLC.
When the Windsor casino in Toronto banned smoking at its casino last summer, it immediately lost one-third of its business as gamblers played table games and slots in Detroit, a U.S. city just over the Canadian border. That casino is now shifting its management team and will become a Caesars property as the venerable Harrah’s Entertainment comes in to operate it after a current expansion is completed next year.
“Obviously, [gaming companies in Atlantic City are] going to have to take a look at things that will make smoking less intrusive than it was, which includes a simple inventory of ashtrays. One thing to be answered is whether casinos will continue to sell cigarettes and other tobacco products,” Harvey Perkins of Spectrum Gaming Group said in an interview. “All of those things have to be reviewed and re-strategized as casinos reposition their business.”
The City Council is having its final vote on the issue January 24, and if passed, would be enacted on April 15. Bear Sterns is reporting that a deal is currently being negotiated which would create a partial smoking ban, allowing as much as 30 percent of the floor going to players who want to puff and play.
Though Nevada recently banned smoking in many public places it spared the casinos.
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