http://www.newjerseynewsroom.com/economy/casinos-continue-to-struggle-in-atlantic-city
Casinos continue to struggle in Atlantic City
Monday, 05 April 2010 15:57
Profits drop by 21.4 percent in 2009
Atlantic City's 11 casino hotels reported a 21.4 percent decline in gross operating profits in 2009, including a 16.4 percent decline in the fourth quarter alone, according to figures made public Monday by the state Casino Control Commission.
Gross operating profits totaled $739.5 million in 2009 compared to $940.9 million in 2008. During the same period, net revenues fell 13.2 percent to $3.89 billion. In the fourth quarter of 2009, the casinos reported gross operating profits of $110.2 million compared to $131.9 million in the same period a year earlier. Net revenues for the quarter were $875.1 million, an 8 percent decline.
"Atlantic City's casinos continued to be hurt by the weak economy and by increasing competition in neighboring states," Commission Chairwoman Linda M. Kassekert said.
Borgata actually finished the year in the black with gross operating profits of $204.4 million, an increase of 1.6 percent over 2008.
Trump Plaza took the worst financial beating, reporting $9.2 million of gross operating profits, down 74.6 percent.
Harrah's Atlantic City gross operating profits of $148.5 million, a 9.5 percent decline. Gross operating profits at Bally's Atlantic City fell by 9.6 percent to $117.1 million, and Caesars reported gross operating profits of $109.3 million for the year, down 28.8 percent.
Trump Taj Mahal earned $85 million in gross operating profits, down 14.6 percent; Showboat reported $63.3 million in gross operating profits, down 19.6 percent; Tropicana reported gross operating profits of $32.7 million, down 42.2 percent from the prior year; and Trump Marina reported gross operating profits of $5 million, down 67.3 percent.
For the year, the Atlantic City Hilton reported a gross operating loss of $16.3 million and Resorts Atlantic City reported a gross operating loss of $18 million.
Gross operating profit represents earnings before interest, taxes, depreciation, amortization, charges from affiliates and other non-cash charges. It is a widely accepted measure of profitability in the gaming industry. After all of those other charges, the industry reported a net loss of $670.3 million in 2009 compared to a net loss of $1.05 billion in 2008.
"The net losses in both 2010 and 2009 include a number of one-time charges such as write-downs in the book value of trademarks and goodwill or gains from the extinguishment of debt," Kassekert said.
The effect of those non-operational charges was particularly noticeable in the fourth quarter of 2009. While revenues were down 8 percent and gross operating profits declined 16.4 percent, the bottom line soared from a net loss of $898.4 million in 2008 to a net profit of $101.5 million.
The occupancy rate in the city's casino hotels declined to 82.5 percent compared to 87.4 percent in 2008.
— TOM HESTER SR., NEWJERSEYNEWSROOM.COM
