More bad news likely in store for AC casinos
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More bad news likely in store for AC casinos
By WAYNE PARRY, AP
posted: 37 MINUTES AGO
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.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
By WAYNE PARRY, AP
posted: 37 MINUTES AGO
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.
Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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Comments
...and wait'll online poker and other internet games become legalized in the US, which I believe will likely happen under an Obama administration. Can you say "AC ghost town"?
<< <i>um, anyone who WANTS to play online poker in the US. already does it
That is completely false - if online poker is legalized in the US there will be at least double the amount of players online without even being debatable, and likely much, MUCH more than that.
<< <i>now I understand why I keep getting all of the two day free accommodations letters from the Trop.... >>
Even without comps, might windup staying in a casino room in AC will be cheaper than renting an apartment, and I'm almost not kidding.
Bottom line - some will need to close. How many I'm not sure, but it could windup being most of them.
collecting RAW Topps baseball cards 1952 Highs to 1972. looking for collector grade (somewhere between psa 4-7 condition). let me know what you have, I'll take it, I want to finish sets, I must have something you can use for trade.
looking for Topps 71-72 hi's-62-53-54-55-59, I have these sets started
<< <i>
<< <i>um, anyone who WANTS to play online poker in the US. already does it
That is completely false - if online poker is legalized in the US there will be at least double the amount of players online without even being debatable, and likely much, MUCH more than that. >>
I agree.
Yea, that logic worked out real well when they passed the lottery here years ago. All of those billions in profits were supposed to be the salvation for our schools, roads, fire departments, etc. .... and all it ever really did was line the pockets of the politicians, their friends, contractors and the Lottery commission. You can't win ... if you don't play!
It makes me sick every time I go to a 7-11 or gas station any where near Baltimore ... and see the long lines of 70 year old ladies and welfare moms standing there with their "list of magic numbers" and hand fulls of cash. Not to mention the bums, drunks and crack heads that are always outside on the sidewalk scratching off tickets in hopes of turning the $2 they bummed into a $20 rock.
Even out here in the suburbs they've had to add extra lines in at most of the grocery stores to handle all the senior citizens and residents that they've hooked on playing the lottery. Not to mention the multitude of bus companies that advertise free daily bus trips back and forth to the slot machines in Delaware and Atlantic City.
So you won't see me shed any tears over gambling or Atlantic City taking a hit. Personally, I think we'd be better off as a nation if the whole industry imploded some day, or if the government decided to go straight and just outright ban all forms of legalized gambling.
Of course, with all that said ... I did win $20 on the football game yesterday! ;-)
<< <i>I'd imagine that Maryland finally cramming the slots bill down it's residents throats will also effect Atlantic City as we were one of the last neighboring states to not have them. It's taken the corrupt a$$ politicians here years and years of slowly draining dry the annual budgets of the schools, fire and police departments to finally get them all lined up and on board ... with the promise of a new "slots payday" for everyone. That's all we've heard during this election season, is non stop commercials filled with the threats of huge tax increases if it doesn't pass, and worried looking teachers and police chiefs explaining how rosy everything will be ... IF we can finally pass the slots machine bill here in Maryland.
Yea, that logic worked out real well when they passed the lottery here years ago. All of those billions in profits were supposed to be the salvation for our schools, roads, fire departments, etc. .... and all it ever really did was line the pockets of the politicians, their friends, contractors and the Lottery commission. You can't win ... if you don't play!
It makes me sick every time I go to a 7-11 or gas station any where near Baltimore ... and see the long lines of 70 year old ladies and welfare moms standing there with their "list of magic numbers" and hand fulls of cash. Not to mention the bums, drunks and crack heads that are always outside on the sidewalk scratching off tickets in hopes of turning the $2 they bummed into a $20 rock.
Even out here in the suburbs they've had to add extra lines in at most of the grocery stores to handle all the senior citizens and residents that they've hooked on playing the lottery. Not to mention the multitude of bus companies that advertise free daily bus trips back and forth to the slot machines in Delaware and Atlantic City.
So you won't see me shed any tears over gambling or Atlantic City taking a hit. Personally, I think we'd be better off as a nation if the whole industry imploded some day, or if the government decided to go straight and just outright ban all forms of legalized gambling.
Of course, with all that said ... I did win $20 on the football game yesterday! ;-) >>
I couldn't agree more. There has never been a single cost-benefit analysis conducted by a reputable economist that doesn't conclude that casino gambling results in a net social loss. To argue otherwise, at this point, would be akin to arguing that 'cigarettes don't cause cancer'.