Atlantic City booms

Casino revenues in Atlantic City were up an astounding 21% in August, with only a 2% decrease in revenue at the incumbent gambling houses. Sports betting was also a hit, grossing $95 million. (Some predict it could surpass Las Vegas by 2023.) This month will provide the true test of Boardwalk sports betting as the NFL season kicks into high gear and MLB playoffs loom. Caesars Entertainment lost market share, down to 29%, and is spending less on promotion. This raises the chicken-and-egg question of whether Caesars is getting less business because it cut back on marketing or vice versa. CEO Mark Frissora has no great love for Atlantic City and his cut-and-run strategy would seem to reflect this.

Overall, Atlantic City was a vindication of the new resort product and a reproof to the doom-and-gloom pundits who say that additional casinos will close because of the increased competition. The overall gross was $270 million, as slots leapt 18% (down 2.5% on a same-store basis) and table games catapulted 28% (up 29% on a same-store comparison). Borgata slot revenues and coin-in were flat, while the Caesars portfolio is tracking better than projected for the quarter. Sports betting was strongest at Borgata ($28K/day) and weakest at Resorts Atlantic City ($6K/day).

Borgata ($70 million) was flat, while Tropicana Atlantic City hung onto second place with $32 million. Trop top management clearly didn’t get the memo that they’re supposed to roll over and play dead for the newbies. Harrah’s Resort ($31 million and change, down 3%) snuck past Hard Rock Atlantic City (just under $31 million) for third place. Resorts ($18 million, down 3.5%) reverted to last place while Ocean Resort grossed $19.5 million, passing Bally’s Atlantic City ($19 million, down 11%), as it began the long climb toward the top of the market. Next up was the Golden Nugget with $20.5% million, a 3% gain, then Caesars Atlantic City, flat at $28 million. Internet gambling numbers aren’t yet available.

* In nearby Pennsylvania, slot revenues were reported and, no surprise, Parx Casino was tops with $35 million, an 8.5% gain. Next up were Sands Bethlehem ($26 million, +2.5%) and Rivers Casino ($23.5 million, +6%). The Meadows had $19 million, a 5.5% gain, Mohegan Sun (-3.5%) and Harrah’s Philadelphia (+1.5%) were virtually tied at $16 million, and Penn National brought in $17 million (+5%). SugarHouse was up 4% to $14.5 million, while Mount Airy grossed $14 million for a 6% gain. Presque Isle Downs was flat at $10 million and Valley Forge Casino vaulted 14% to $7.5 million. Because Lady Luck Nemacolin is too stubborn to pay the fee that would allow non-guests to gamble, it crept in with a puny $2.5 million, flat with last year.

* In Detroit, Jack Greektown made a hard charge toward the basket, up 10% to $28 million. However, MGM Grand Detroit gained 10% too, up to $53 million, while MotorCity rose 4% to $40 million. Between Dan Gilbert shopping his Jack properties around and Marian Illitch’s advanced age, two of the three Motown casinos could have new ownership soon. Growth-minded companies must be watching this market closely. Hey, Derek Stevens, what about a homecoming?

* Cameron McKnight of Credit Suisse has some opinions on Las Vegas‘ squishy-soft third quarter: “In our view, there is definitely evidence to suggest weak 3Q guidance was a ‘perfect storm’ and more a one-off, versus an early sign of a recession.” He adds, “With every positive macro data point, we sense an equal amount of late cycle anxiety from investors. We recall a comment from Mike Brown, CEO of Wyndham Destinations, who specifically noted that he sees a difference between Wall Street’s fears/perception and what he’s seeing in the business. Specifically, on the recession question, he noted: ‘we’re just not seeing it.'” As for resort fees, he says about half of them are reflected in ADR at Caesars’ properties and that consumer resistance is greater at conventional hotels than at resorts. Make your voices heard, readers!