The Economic Impact of Casino Closings

Atlantic City Casino Revenue, Minus Closure, Rises

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    NEWSLETTERS

    In the midst of the Atlantic City casino crisis, one casino is seeing an increase in profit. NBC10's Ted Greenberg has the details.

    Like a ship struggling to right itself in a roiling sea, Atlantic City's casinos are trying mightily to find balance amid a rapidly contracting and constantly changing gambling market.

    On Monday, they got some unexpected good news, even if it might not last long.

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    Not counting the Atlantic Club, which closed in January, the 11 casinos that operated in both 2014 and 2013 increased their revenue by nearly 4 percent in June. Most of that improvement was due to the $9.5 million in Internet gambling winnings that did not exist a year ago.

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    The numbers come as Atlantic City's casino market is experiencing a rapid contraction. Trump Plaza sent out closing notices to 1,153 workers Monday, the Showboat is closing Aug. 31, and Revel says it also will shut down if a buyer can't be found at a bankruptcy court auction next month. That could result in a quarter of Atlantic City's casinos shutting down in just nine months in the oversaturated northeastern gambling market.

    With the Internet money and without the Atlantic Club, the casinos won $235.9 million in June, up from $227.1 million in June 2013, when Internet gambling was not yet legal in New Jersey. Although it still helped the bottom line, Internet gambling registered its third straight monthly decline.

    When the Atlantic Club's revenue numbers are factored in, however, the casinos' revenue was down 5.7 percent for the month.

    Trump Plaza posted the biggest decline in June, down nearly 32 percent from a year ago to $4.7 million. Showboat was down 16.6 percent to $14.1 million, and Revel was down 1.9 percent to $11.3 million.

    The Golden Nugget posted the biggest monthly increase, up more than 34 percent to $14.3 million. The Tropicana was up nearly 23 percent to $25.8 million.

    Among Internet gambling sites, the Borgata continued to lead the market with $3.4 million in online winnings. Caesars Interactive had $2.6 million, the Tropicana had $1.7 million, the Golden Nugget had $710,635 and the two Trump casinos each had about a half million in online revenue in June.

    Atlantic City has seen its casino revenue fall from a high of $5.2 billion in 2006, just before the first casinos opened in nearby Pennsylvania, to $2.86 billion last year.

    More than 7,000 Atlantic City casino workers — or about one in four — have been warned their jobs could disappear within 60 days. The head of the local casino workers' union calls that "a pending catastrophe," not only for the workers and their families, but for the state which relies on casino taxers to fund programs for senior citizens and the disabled.

    The saturation of the northeast casino market has been most acutely felt in Atlantic City, where two local rivals — Caesars Entertainment and Tropicana Entertainment — teamed up to buy the Atlantic Club from bankruptcy court, divvy up its assets and shut it down in the name of reducing competition. Caesars is closing its own still-profitable Showboat for the same reason — to reduce the number of casinos here and improve conditions for the remaining ones.