Smoking Ban Fallout: All 11 Atlantic City casinos post revenue drop

The Philadelphia Inquirer reports:

ATLANTIC CITY - The 11 casinos here reported a 10 percent decrease in total revenue last month, with every gambling hall, even the formidable Borgata, showing a decline.

The casinos won $355 million at the slot machines and table games, compared with $394.5 million in January 2007. The revenue losses ranged from 21 percent at the Tropicana and the Trump Marina to 0.8 percent at Trump Plaza.

The figures, released yesterday by the New Jersey Casino Control Commission, underscore the continuing impact of Pennsylvania and New York slots parlors and last year's partial smoking ban on Atlantic City's casino floors.

The numbers also come on the eve of the debut of Pennsylvania's seventh casino - Hollywood Casino at Penn National Racecourse in Grantville, just outside of Harrisburg.

The $310 million casino opens today and will add 2,000 slot machines to the Pennsylvania gaming market. Its clientele will likely include former bus riders to Atlantic City from that part of the state.

The half-dozen other slots parlors in Pennsylvania grossed $107.5 million last month. The state does not allow dealer-staffed table games.

"A new factor that was introduced to the equation in January was a declining economy," Deutsche Bank gambling analyst Andrew Zarnett said, "so that, coupled with the competition from Pennsylvania and the limited smoking, and a little bit worse weather than the prior year, has led to continuing decreases in gaming win."

Slot machines accounted for $234.2 million of the revenue and table games $120.8 million.

A critical factor was the continuing decline in slots revenue, which was off 13.9 percent - but still represented two-thirds of gambling revenue for the seaside resort. Table-game revenue decreased 1.5 percent.

The impact of Pennsylvania slots on Atlantic City has been dramatic. Last year's total revenue for the 11 casinos here was $4.9 billion, down from $5.2 billion the previous year.

The six Pennsylvania slots parlors raked in $1 billion in total gambling revenue for 2007. Pennsylvania takes a 55 percent tax on gross slots revenue. That equated to $59.1 million from last month's $107.5 million.

In New Jersey, the tax is 9.25 percent on gross gaming revenue - $32.8 million last month - which the state uses to benefit senior citizens and people with disabilities.

"Atlantic City," said Larry Klatzkin, managing director of Jefferies & Co., of New York, "is still trying to [overcome] the smoking ban and Pennsylvania opening up.