N.J. Gambling Revenue Posts Record Drop on Storm’s Impact
Atlantic City gambling revenue fell 28 percent in November after Hurricane Sandy forced casinos in the New Jersey seaside resort to close for six days.
Casino winnings slid to $176.6 million from $244.9 million a year earlier, the New Jersey Division of Gaming Enforcement said today on its website. Governor Chris Christie ordered the state’s casinos shuttered from Oct. 28 to Nov. 2.
The results marked the largest single-month decline recorded in the state, according to John Kempf, an RBC Capital Markets analyst, and followed October’s 20 percent drop. While the 12 casinos sustained minor damage, the storm disrupted train and bus service, and some roads were closed. Fallen trees and power failures also kept away would-be customers. At least nine conventions or trade shows were canceled.
“The real issue remains the lost visitation by people who were severely impacted by the storm,” Kempf said in a report today. “It is our opinion that it will take a number of months for volumes to return to normalized levels.”
Gambling revenue declined 13 percent in the three weeks ended Nov. 30 from a year earlier, according to the state. Results were down 63 percent for the two weeks that ended Nov. 9, the period that included the storm and its aftermath.
“Based on weekly casino win trends for the past three weeks, the Atlantic City casino industry is showing signs of resiliency,” the state said.
For the year through November, casino revenue declined 7.9 percent to $2.8 billion.
Caesars Entertainment Corp. (CZR), the largest player in Atlantic City, saw winnings at its four properties decline 37 percent to $69.3 million, according to Carlo Santarelli, an analyst at Deutsche Bank Securities. At Borgata, the city’s top-grossing property, revenue fell 15 percent to $42.7 million. Borgata is a joint venture of Boyd Gaming Corp. (BYD) and MGM Resorts International. (MGM)
Caesars chose to market the entire city rather than its individual properties after the storm, according to Gary Thompson, a company spokesman. “Nice try, Sandy...but we’re Jersey strong,” read one ad.
Revel Entertainment Group LLC, the newest casino in Atlantic City, posted November revenue of $6.2 million, down 33 percent from October and the lowest tally since its March opening, Kempf said.
New Jersey’s senate president, Stephen Sweeney, said last month he was seeking a detailed financial report on the closely held Revel, saying the state-supported property is “burning cash at an alarming rate.” The company said last month it was seeking raise additional funds.
Caesars rose 4.1 percent to $7.62 at the close in New York. Boyd gained 1.1 percent to $5.72, while MGM fell 0.2 percent to $10.91. All three are based in Las Vegas.
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