More bad news likely in store for AC casinos

[ernestrp]

More bad news likely in store for AC casinos
By WAYNE PARRY (Associated Press Writer)
From Associated Press
November 08, 2008 3:51 PM EST
ATLANTIC CITY, N.J. - Lately, the luck has been all bad for Atlantic City's 11 casinos. Last week alone, a major casino developer put a $2 billion Boardwalk project on indefinite hold, and the city's newest and most successful casino laid off 400 workers.

And Donald Trump had to knock $46 million off the price of one of his casinos in order to salvage a deal to sell it to someone else. Trump's casino company is cutting the pay of its top executives by 5 percent.

More bad news is expected Monday with the release of October's casino revenue numbers. To say they are expected to be bad is putting it mildly.

Consider: September saw the greatest monthly decline in revenues in the 30-year history of legalized gambling, down more than 15 percent.

And that was before the financial meltdown hit with full force, and before a smoking ban on the casino floor took effect; it's not due to expire until Nov. 16.

That ban chased away some of the city's most prolific gamblers, who went to slots parlors in Pennsylvania and New York, and Indian-run casinos in Connecticut, where they can still smoke.

All told, it was a most unwelcome October surprise.

On Thursday, Pinnacle Entertainment said it could be "years and years and years" before it builds its beach house-themed casino on land where the Sands Casino Hotel once stood. Since the company blew it up last fall to make way for its new project, the land has sat vacant, to the dismay of city officials and many residents, including Sands workers who lost their jobs to make way for a new resort that now looks iffy.

In fact, Pinnacle says it would consider selling the land and backing out altogether "if someone made us a decent offer."

Pinnacle chairman and CEO Dan Lee was gloomy about the atmosphere in Atlantic City right now.

"With Atlantic City, we recognize that this isn't an environment to go dream big," he said. "We are going to sit in Atlantic City. We may be sitting there for a very long period of time."

Joining him on the bench is MGM Mirage, which announced a massive $5 billion casino hotel project in October 2007, only to put it, too, on indefinite hold because of the economy.

That's $7 billion worth of new development that might never happen.

Job prospects aren't bright, either. The Borgata's job cuts were surprising in that the casino is the newest and most successful in Atlantic City.

Borgata joined the four Atlantic City casinos operated by Harrah's Entertainment Inc. - Harrah's Resort Atlantic City, Caesars Atlantic City, Bally's Atlantic City, and the Showboat Casino Hotel - which laid off "several hundred" employees in recent months, spokeswoman Alyce Parker said.

Resorts Atlantic City, said that casino has also had layoffs this year, but a spokesman would not say how many.

According to the state Casino Control Commission, there were 40,124 workers in the Atlantic City casinos as of Nov. 1. - a reduction of 664 since the beginning of the year, though not all were due to layoffs.

Also in October, Trump Entertainment Resorts and New York developer Richard Fields agreed to reduce the purchase price for the Trump Marina Hotel Casino to $270 million, down from the $316 million they set as the price back in May. The declining economy was a main reason.

On Friday, the company said it was cutting the salary of its 22 highest-paid executives by 5 percent to save about $500,000 a year. Donald Trump does not draw a salary from the company, where he serves as chairman.

Trump Entertainment said cost-cutting is essential due to heavy losses in the third quarter. On Friday, the company reported a net loss of $139.1 million, or $4.39 per share, compared with a profit of $6.6 million, or 21 cents per share, in the third quarter last year. Net revenue fell to $198.3 million from $216.6 million.

For the first nine months of the year, Atlantic City casinos won $3.6 billion, down 6.3 percent from the same period in 2007.

[WallyOPD]

Are Vegas casinos feeling the pinch as strongly as AC casinos?

I like how the end of the article refers to how much the casinos have "won" so far in 2008 as opposed to earned. :lol:

[atari2600]

maybe they will go back to the older blackjack rules to get more people to play again. :)

[El Scorcho]

Granted, I haven't been to Atlantic City since 2004 but my general impression is that they (Taj Mahal, Caesars, Tropicana, etc.) have 0 interest in funneling money into improving the properties and have 100% interest in simply milking the hell out of their players.

The problem is that they've not managed to stand themselves out from the influx of Indian casinos popping up all along the eastern seaboard. Indian casinos caught on all over the desert southwest and California but Vegas seems to do just fine regardless. Atlantic City could be this way as well but it seems (outside of the Borgata) that they are content having a shithole town with shithole casinos and doing nothing about it. Truth be told, I wouldn't go back there either.

I've gambled in probably 30+ casinos in my life and few have been as unenjoyable as the ones in Atlantic City.

[pedagogue]

I've gambled in probably 30+ casinos in my life and few have been as unenjoyable as the ones in Atlantic City.

Yeah, but we got to hang with Big [O]range!

[JimRochester]

I used to go there twice a year for the mortgage banker conferences. at the time mortgage business was booming so they were big affairs. Trump started going downhill long ago. You could see they just weren't improving their properties. DUring the week they didn't even have the bar open. The Borgata we liked much better.

The conferences have gone from 700 conventioneers and hundreds of vendors paying thousands of dollars to a couple hundred people paying $25 to walk the convention floor for a couple hours. Like me 75% of the mortgage related industries are laid off and only AIG is still going on retreats.

[SoSpacey]

Atlantic City decided 6+ years ago to change their strategy with gamblers. It used to be you could get a low-priced room even on a weekend and they would just try and make money on gambling.

Then someone woke up one day and decided that $500 Saturday night rooms were a better strategy. Atlantic City wanted to become a Vegas-like destination. So I say fuck 'em.

I used to go to AC quite often. Comps were plentiful. With room prices the way they are now most people can't afford to go drop $500 for a room and then gamble away another $500. I know I dont want to start my weekend down $500.

Vegas got away with expensive rooms because it is a destination. Top shows and top restaurants, plus gambling. And it is a vacation destination, not just a place to gamble.

Atlantic City is not a vacation destination. Wrong strategy and it is backfiring on them.

Good. Maybe now I can get a room for cheaper than a flight to Vegas.

[namja]

Are Vegas casinos feeling the pinch as strongly as AC casinos?
Yup. Vegas casinos are feeling the pinch too. I got a 4 night comped rooms at the Venetian offer. I don't even play there regularly. I've only been there once and played poker for 6 hours, that's it. And even Bellagio sent me a free room offer.

I like how the end of the article refers to how much the casinos have "won" so far in 2008 as opposed to earned. :lol:
Isn't that how all businesses are run? Microsoft is expected to earn $$$ but if they only earn $$, then they're not doing so well ...

[WallyOPD]

Isn't that how all businesses are run? Microsoft is expected to earn $$$ but if they only earn $$, then they're not doing so well ...

I was just referring to the use of the term won. The casinos have revenue streams beyond just gaming, and they play games at a high enough volume that they're not really gambling anymore.

[Red Dog]

A.C. sucks, so I don't feel their pain.

I thought I heard that they delayed the implementation of the smoking ban in the casinos because of the downturn.

As for Vegas, I was there this past weekend, and it was less crowded than usual for an Oct/Nov weekend, but not that much different. However, rooms were cheaper than usual and I did notice lower table limits - for example, a plethora of $10 BJ tables at Bellagio - something I had rarely seen in the past. Strip clubs were less crowded too. Yep, when the strippers are pulling in less dough, you know the economy is bad. ;)

The thing that really sucked was that flights were still expensive.

[Dean Kousoulas]

AC holds a deep spot in my heart (it was my parent's idea for a vacation when I was growing up) Yea it's a shit city with mostly bad casinos but I just can't get enough of the boardwalk with it's .99 stores and fortune tellers. It's my getaway. Plus Tropicana treats my family good.

I kinda had to see this coming, especially with this downturn going on. I've been to Foxwoods many times this year, and every time i've gone it's been packed, even on weekdays.

[kvrdave]

I'm planning to go to Vegas next spring, so I need to find a way to get them to comp me some rooms. :lol:

[Deftones]

I'm planning to go to Vegas next spring, so I need to find a way to get them to comp me some rooms. :lol:

Sign up for the player cards at the casinos. Apparently places are sending out free room offers left and right due to the status of the economy.

[JimRochester]

Sign up for the player cards at the casinos. Apparently places are sending out free room offers left and right due to the status of the economy.

You can also go on their website and get the deals emailed. I'm always getting those Sun-Thursday deals. I'm going in July for my 50th and waiting to see what kind of deals there are before I decide where to stay.

[Dean Kousoulas]

Sign up for the player cards at the casinos. Apparently places are sending out free room offers left and right due to the status of the economy.

My mother only tags along with me about once a year for a trip to AC and the Tropicana just gave her 2 free nights to be used at any time. She only plays quarter slots.

Desperate times I guess...

[DeltaSigChi4]

Tropicana can't GIVE their rooms away. With that being said, on a serious note, the economy is pretty bad right now. Tom Cruise knows when City Center will be completed and what type of traffic it will generate.

E

[Matthew Chmiel]

For any of those who know about Primm, NV (or what I like to call Vegas' asshole), has been doing this for the past month now:

http://www.primmvalleyresorts.com/images/promos/freecation_large.jpg

In the month of December, it was free for all Vegas locals.

In the month of January, it is now free for all California locals.

A slew of my co-workers and I went to party there last weekend and all three hotels in Primm were sold out for the evening. People EVERYWHERE, which was completely surprising for all of us.