Atlantic City Suffers Double Digit Decline in January

by John Mehaffey on February 14, 2013

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    Atlantic City suffered yet another decline in year over year gaming revenue in January.  The gross gaming revenue in January 2013 was $205.6 million.  That was down 13.2 percent from January 2012.  Note that gross gaming is just the casinos’ win during the month, not actual net income.  It also does not include non gaming revenue, such as hotels and restaurants.

    Atlantic City casinos paid $15 million in taxes to the state in January, which is at a rate of 8%.  Atlantic City casinos are also required to reinvest 1.25% of their gross gaming win into their properties.  This number was $2.6 million in January.

    Only one of the twelve Atlantic City casinos posted a year over year increase in gaming win.  That property was the Atlantic Club.  They posted a 14.9% increase over the previous year, but that only equaled an increase of about $1.2 million.  Atlantic Club has been in the news recently as the property PokerStars has under contract to expand their business into the US brick and mortar gaming sector.

    Revel, the newest Atlantic City casino, posted gross gaming revenue of only $7.9 million.  That was a drop of 19% from December and the second worst month in Revel’s nine month history.  The property carries $1.2 billion in debt.  That debt is impossible to service on gaming revenues of less than $8 million per month.  Revel recently hired Kirkland & Ellis LLP and investment bank Moelis & Co to work towards a possible restructuring that may include a bankruptcy.  The property, which cost $2.4 billion to construct, consistently ranks 10th or 11th out of the twelve Atlantic City properties in terms of gross gaming revenue.

    Atlantic City gaming revenue has been on a downward spiral for over five years.  State lawmakers hope that online poker and casino games can change that trend.  While Governor Christie conditionally vetoed a bill that would have allowed those games, state legislators are expected to approve the governor’s changes on February 26th.

     

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