The casino industry's summer slump continued in August, with gaming revenue plunging by double digits amid the sluggish economy and even tougher competition from Pennsylvania.
Altogether, Atlantic City's 11 casino hotels took in $347.5 million from the slot machines and table games, an 11.3 percent decline from the $391.7 million in August 2009, the New Jersey Casino Control Commission reported Friday.
August's results reinforced just how challenging the summer season has been in the resort town. Gaming revenue tumbled 11.1 percent in June and fell 5 percent in July. Atlantic City's string of revenue declines has now stretched to 24 straight months, reflecting the weak economy and the growth of gambling in Pennsylvania.
Although Pennsylvania has been surging, the formerly recession-resistant gambling industry has suffered in other jurisdictions. Nevada, a month behind Atlantic City in reporting its casino revenue, was down nearly 5 percent in July. Slot revenue at Delaware's three racetrack casinos fell almost 5 percent in August, while slot winnings at the two Indian-owned casinos in Connecticut were up just 1.5 percent in July.
A lighter entertainment schedule in August was one factor contributing to Atlantic City's lower revenue, according to the Gaming Industry Observer newsletter. The newsletter said there were 50 entertainment events at the casinos this August compared to 57 during the same month last year.
On top of everything else, even the calendar proved unfriendly in August. This August had one fewer Saturday than last year, depriving the casinos of an extra money-making weekend day.
"The win on Saturday is 50 percent higher than any other day of the week, so that's a big impact," said Mark Juliano, chief executive officer of the three Atlantic City casinos owned by Trump Entertainment Resorts Inc.
August represented the first full month for new table games at Pennsylvania's nine casinos. Competition in Pennsylvania will become more intense on Sept. 23, when the new $355 million SugarHouse Casino will open in Philadelphia, only about an hour's drive from Atlantic City.
"A lot of the trips that may have come to Atlantic City went to Pennsylvania instead because of the newness factor," Cory H. Morowitz, a casino analyst and chairman of Morowitz Gaming Advisors LLC, said of the effect of Pennsylvania table games.
However, Juliano said he was pleasantly surprised that the start of table games in Pennsylvania did not hurt Atlantic City even more in August.
"I think that if you're talking about the first full month for the introduction of table games in Pennsylvania, and knowing that there was going to be an absolute period of trial, I'm not all that disappointed in August," he said.
Slot revenue in Pennsylvania rose 5 percent in August to $196.6 million. Pennsylvania's table games revenue is compiled separately and will not be released until Sept. 23 by the state's casino board.
In Atlantic City, slot winnings were down 11.3 percent in August to $245.1 million, while table games revenue fell 11.4 percent to $102.4 million. For the first eight months this year, the casinos have won nearly $2.5 billion from gamblers, down 8.4 percent compared to the same period in 2009.
Every Atlantic City casino had lower revenue in August, including seven that fell by double digits. Resorts Atlantic City continued as the industry's worst performer, down 21.2 percent in August and now off 17.8 percent for the year.
Resorts is in the process of being sold for $35 million to former Atlantic City gaming executive Dennis Gomes and his financial partner, New York real estate developer Morris Bailey. Gomes could not be reached for comment about Resorts' financial performance in August.
"I think Atlantic City is in transition right now. I don't know if we can expect anything different in the next few months," Morowitz said, predicting more declines.
Juliano expressed some hope for September, noting that the Trump casinos are up close to 4 percent for the first 10 days of the month, largely because of a strong Labor Day holiday weekend.
While summer officially continues through late September, Atlantic City's peak tourist season usually ends after the Labor Day weekend. August had been seen as the city's last chance for salvaging some growth for the summer, but the revenue figures proved otherwise.
"Given the competition we're facing and the economy we're in, it wasn't great," Juliano said of the summer season. "It was a softer August than we would have liked."