Atlantic City casinos’ operating profit up
ATLANTIC CITY (AP) – Atlantic City’s 11 casinos saw their gross operating profit increase by nearly 35 percent in the second quarter of this year. But no one’s throwing any parades just yet.
Most of the increase appears to have been generated by the Borgata Hotel Casino & Spa, which reached an $88 million tax settlement with the city in June. Most other casinos, while turning a profit, saw that profit decline in the second quarter.
Figures released Friday by the state Division of Gaming Enforcement show the casinos posted a collective gross operating profit of more than $83 million in April, May and June of this year.
That’s an increase of 34.9 percent compared with the same period last year, when New Jersey had not yet legalized Internet gambling.
Gross operating profit reflects earnings before interest, taxes, depreciation and other charges, and is a widely accepted indicator of profitability in the casino industry.
The Borgata posted the largest operating profit at $43.2 million, compared with $28.1 million in the second quarter last year. Its increase was more than 53 percent. Joe Lupo, the casino’s senior vice president, said $11.8 million of the tax settlement was applied to second quarter earnings.
“Take that away, and we still had a very profitable quarter,” he said. “We had great visitation and volume. I think it was cabin fever: people wanted to get out and come down to Atlantic City.”
Revel, which is closing over Labor Day weekend, had the biggest loss at $24.3 million — but that was still a 44 percent improvement over its second quarter performance last year when it lost $43.7 million. Revel is closing its hotel on Sept. 1 and its casino the following morning.
Trump Plaza, which is shutting down Sept. 16, showed a $3.3 million operating loss for the quarter, compared with a $143,000 profit in the second quarter of last year.
The Showboat, which is closing Aug. 31, posted an operating profit of $7.6 million for the quarter — something that continues to anger the more than 2,000 workers there who will lose their jobs at a still-profitable casino. The Showboat had a profit of $9.5 million in the second quarter of last year.
There was one turnaround story in the second quarter. Resorts casino Hotel went nearly $2 million into the black, compared with a $1.3 million loss in the second quarter of last year, when it was still paying for startup costs for its Margaritaville restaurant and entertainment complex.
Caesars Interactive posted a $2.7 million quarterly loss associated with continuing expenses of ramping up Internet gambling operations.
Hotel occupancy was more than 83 percent for the quarter, up nearly 5 percent from the same period last year. Revel had the highest occupancy rate at 93.5 percent. The Borgata had the highest average room rate at $131.97; resorts had the cheapest at $78.92.
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