| A.C. casino revenue surpasses $5 billion
By MICHAEL B. BAKER
January 11, 2006 - ATLANTIC CITY - Gaming revenues eked by the record $5 billion mark in for the first time in 2005, fueled by a strong December for most of the city's resorts.
By a few thousand dollars, Atlantic City has joined Las Vegas in the elite classification of a casino town that can pull in more than $5 billion from gamblers during a year. Casino gaming revenues rose 4.4 percent to $5.02 billion for 2005, the Casino Control Commission reported on Tuesday. Eight of the city's 12 properties saw growth in their revenues.
"I think it puts us right there with Las Vegas in terms of the gaming numbers," said Linda Kassekert, chair of the commission. "It just really shows that Atlantic City is developing into a destination and not just a day-trip."
Megaresort Borgata Casino Hotel & Spa continued to dominate, posting $704.4 million in revenues for the year, up 10.7 percent from the year before. But it was Tropicana Casino and Resort that saw the largest growth. Its revenues surged 21.4 percent to $441.9 million for the year, which analysts said was undoubtedly tied to its $280 million hotel, retail and entertainment complex The Quarter.
The revenue, or "win," refers to only the amount lost by gamblers at the slot machines and gaming table and does not consider money brought in from retail enterprises such as The Quarter. But Brian McGill, a gaming analyst for Susquehanna Financial Group, said it's those types of ventures that will keep attracting gamblers and increasing revenues.
"That's kind of the blueprint for success in Atlantic City," McGill said. "It now depends more on the non-gaming entities' side."
As a comparison, Las Vegas' 43 casinos reported $5.34 billion in gaming revenue in 2005. But Las Vegas Strip casinos also reported $9.5 billion in nongambling revenue that year, compared to the $300 million posted by Atlantic City.,
The smaller properties that have less to offer in terms of nongambling activities had a tougher year, McGill said. Sands Casino Hotel, the city's smallest gaming hall, saw its revenues drop 7.1 percent to $176.6 million. And the Atlantic City Hilton also saw its revenues drop 2 percent to $289.4 million, caused by an 11.4 percent drop in table game revenue.
Following its merger with Caesars Entertainment, all four of Harrah's Entertainment Inc.'s Atlantic City properties saw an increase in revenues this year. Showboat Casino Hotel, which opened its House of Blues music club last year, posted an increase of 5.6 percent to $414.4 million. Caesars Atlantic City saw the same rate of growth, with its win increasing to $523.5 million.
Bally's Atlantic City, which includes the Wild Wild West Casino and the former Claridge Casino Hotel, was second in terms of revenue among the city's resorts with a win of $645.6 million, although that was up only 0.1 percent from 2004. And Harrah's Atlantic City had the biggest growth of the Harrah's properties, with its revenue up 5.9 percent to $476.3 million.
Two of Donald Trump's casinos, which emerged from bankruptcy last year, took a hit in 2005. Both Trump Marina and Trump Plaza Hotel and Casino saw revenues drop 4.7 percent, while Trump Taj Mahal Casino Resort's win rose by 3.3 percent to $519.9 million.
Resorts Atlantic City continued its strong performance with $272 million in revenues for 2005, up 7.6 percent from 2004.
December was generally a good month for casinos, with overall revenue up 7.3 percent to $387 million. A few casinos saw large drops in revenue - such as Sands, which had a 20.1 percent decrease in overall revenue and a 36.5 percent decrease in table game wins - but Caesars, Tropicana, Resorts and Trump Taj Mahal also had gains of more than 15 percent. McGill said the timing of Christmas and New Year's Day on Sundays were part of that boost.
"Any time you can increase revenue over 7 percent, that's higher than most people's expectations," McGill said. "I think it points to obviously a pretty healthy end of the year."
McGill said the industry also has reason to be optimistic in 2006 and the coming years. Several resorts have expansions and renovations planned, and two are scheduled to open this year: a new casino and retail area for Borgata and Caesars $175 million upscale shopping complex.
"I think this bodes well from what you're seeing here," said Larry Mullin, president and chief operating officer for Borgata. "We believe we'll see continued growth with our expansion.
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