Casinos made a bad bet in Atlantic City. They wagered that the City Council didn’t have the resolve to ban smoking altogether (except in what promise to be hellish little cells). So they dragged their feet when it came to complying with the city’s 75/25 ratio of smoke-free/smoking-enable casino square footage.
Bad idea.
The A.C. City Council voted unanimously last night to escalate to a total ban, motivated in large part not by the merits of the issue but anger at casino intransigence. Some had taken the stance that they might as well not comply with 75/25 because they casinos would eventually be made to go 100% smoke-free … a self-fulfilling prophecy if ever I heard one. A few were complying, but not fast enough to please the city fathers.
The latter may have cut off their collective nose to spite their face, especially if smokers flee en masse to casinos in Pennsylvania and New York. This certainly isn’t the best time for Atlantic City to sustain an exodus of customers. But, faced with casinos that were essentially daring the City Council to do something about their noncompliance, local political leaders were in one of those unenviable spots where you have to choose between being disliked or being a doormat. Obviously, they didn’t opt for “doormat.”
But, for pity’s sake, who was in charge of message discipline for the casinos? “Casino officials have contended that the languid pace is common,” writes The Press of Atlantic City. Call me eccentric, but a slow-moving industry doesn’t seem like the best PR image to be putting out there. And, sure as shooting, shareholders don’t react well to the notion of languor in the executive suite. Maybe those same officials can try that “Don’t hassle us; we’re lazy” argument on newly disgruntled smokers and see how well it plays with them.
Another month, another set of unfavorable revenue comparisons for Atlantic City, -10% from last March. The good news/bad news dichotomy is a familiar refrain: Slots are down (-11%) and table games are up (-6.6%). So, for all the bad news, we are seeing a kind of forcible reinvention of Atlantic City as a table-game destination, which was probably inevitable once slot machines were no longer a novelty along the Eastern seaboard.
Mind you, we’re still talking about the fourth-highest March in Atlantic City and, measured against last year’s best-ever March, comparisons were bound to be unflattering. Unsurprisingly, Borgata leads everyone in average daily revenue, almost $250K/day ahead of Bally’s Atlantic City and raking in triple the amount won by tail-end Charlie Trump Marina.
Nobody was spared some degree of decline but Harrah’s Marina kept it below 1%, thanks to an exceptionally lucky month at the tables, +40%. Trump Plaza and Taj Mahal held their revenue shrinkage below 5%, followed by Trump Marina (one of several casinos to have good table play wiped out by lower slot win), at -6%.
Bally’s was the poster child for this, a 1% table win increase negated by an -18% drop in slot win, worst on the Boardwalk. Borgata, Resorts Atlantic City and the Tropicana got walloped on both fronts, with the latter suffering 15% and 32% lower win at tables and slots, respectively. Nobody gained ground at the slots but at least Bally’s, Caesars, Harrah’s Marina, Showboat and Trump Marina posted higher table win than last year.
Higher revenue is bad? So claims one Macao gaming executive. However it’s the managing director of a Stanley Ho affiliate, one that owns the Grand Emperor, so there may be some sour groups there, born of the fact that Melco‘s Crown Macau is drinking everybody’s milkshake at the moment.
On the other hand: looser lending standards by junketeers? That sounds like something that could easily come back to bite them (if not the casinos) in the @$$. This could be a situation worth monitoring.
