Marching to Victory on the Boardwalk

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April 24th, 2017
Back Marching to Victory on the Boardwalk

March of 2017 compared to March of 2016 for Atlantic City compares extremely well and looks good for the future of the city regarding long-term revenue gains. Following up the slight increase in overall gaming win for 2016 compared to 2015, and after a few slightly positive months, the concern was the first couple of months for this year was noise rather than signal. Fortunately, March should dispel that theory altogether.

Getting right to the numbers; overall casino revenues (Including Internet Gaming Win) were 221858889/202971050 = 1.0931 (rounded) which is to say up 9.31% compared to March of the previous year. While 9.3% may not seem like a ton, imagine you made $50,000/year at your job and got offered a 9.3% raise, the following year you would make $54,650, so that would be $4,650 in extra cash. That’s huge.

Atlantic City experienced the good fortune of enjoying gains in both segments of gaming operations, online and live casino. You might recall that the overall casino win numbers were greater for 2016 than 2015 (the first comparison since 2007 v. 2006 that happened), but that was driven entirely by Internet Gaming win. Fortunately, live casinos improved dramatically for March of this year compared to last winning 200113458/187463591 = 1.06748 or a 6.748% increase in live gambling win.

While the actual dollar amount of the live gaming win was greater for March, Internet Gaming Win was the unsurprising victor in terms of percentages. With 21745431/15507459 = 1.402256 or a 40.2256% gain, the increase in online gambling win is part of a continuing trend that has gone on since the beginning of Internet gaming and has shown no signs of stopping. With $6,176,515, the Golden Nugget online once again surpassed its own previous record for a month (set just last month) and there are no other online casinos that can even come close.

1 revenues

While the Golden Nugget’s online gaming win continues to dramatically improve, the live casino segment of the business seems to be finally steadying after a huge push beginning with the closure of several casinos in 2014. At $16,536,736, Golden Nugget’s live casino revenue fell about 1.7% ($278,486) compared to March of last year. The tale of the tape is pretty simple, slots gained just south of two million and tables lost just north of two million. It’s not unreasonable to believe that they may have just run bad against one or a few high rollers.

Bally’s continues to underperform and has lesser revenue compared to the same month from last year for the second month in a row. Bally’s also has the misfortune of being the only casino to have experienced gaming win declines compared to 1Q last year. With $17,030,524, the establishment was down 2.2% ($384,301). Bally’s seems unable to capitalize in any way whatsoever on the closure of the Trump Taj Mahal or on the new revenues flowing into the city. Bally’s gained slightly on machines and fell slightly on tables, but not in a way that would tend to jump out at anyone.

Tropicana led in the biggest dollars and cents gains compared to March of last year coming in at $31,383,109 which puts them up $8,936,256 for an impressive +39.8%. My guess is that Carl Icahn has successfully marketed to former Trump Taj Mahal customers as Trops revenue gains are almost 70% of the entire gaming win that The Taj drew the previous year.

The city is up $12,649,867 in live gambling win, in fact, after taking the revenue from The Taj into consideration. That means that the live gaming win is essentially entirely new revenue for the city rather than a mere redistribution. Again, this is live gaming win we are talking about which has nothing to do with internet performance.

Tropicana has supplanted Caesars as the second best grossing property in the entire city in live casino win. Of course, that is largely because Tropicana is now effectively Tropicana plus most of the former customers of The Taj. Borgata is first as always, and the only casino that even might change that is Hard Rock which will:

2 Golden Nugget

A.) Not open until Summer of next year at the earliest.

AND

B.) Probably not change Borgata’s position, Revel sure didn’t when it opened!

Caesars enjoyed $29,283,211 in live gambling win for a percentage improvement of 31.9% in that regard and came in second in both dollars and percentage gained.

Resorts performed very well on a percentage basis with the Taj gone and is up 25.3% with $16,337,223 in live win. While they are still the lowest-grossing casino in the city (by far) they are also the smallest currently operating casino in the city, so they are likely doing just fine.

The Borgata enjoyed an 11.5% gain to $59,945,330, which is the fourth-best increase in terms of percentage. They also enjoyed table wins of four million over the same month as last year.

Caesars enjoyed the best table game win increase for the month, so much so that it almost has to be some anomaly. If not an anomaly, then that marketing department deserves a huge raise! The property added nearly 6.9 million dollars to the table game drop compared to last year while slots were steady. The number was almost double that of last March; I had to look at the chart about three or four times before I was ready to believe it!

Harrah’s stayed steady enjoying a $1,066,802 increase to live casino win for a total of $29,597,325, which represents an increase of 3.7%. Tables were down about three million, slots were up about four million, and there you have it. Are the CET properties actively trying to send all of their tables players to Caesars? What’s going on here!?

3 Borgata

Resorts enjoyed gains of about 1M on machines and 2M on the felt.

The source of the revenues seems to change a bunch from tables to slots and back, depending on the month and the casino. However, the quarterly numbers will bear out the steady increases that the city has enjoyed thus far this year.

Bally’s has dropped 2.3% and is the only casino less successful than it was last year. It doesn’t seem to matter that the Taj is gone of that millions of dollars in new revenues have come into the city, the interest in the property simply doesn’t seem to be there. It almost seems like Bally’s is the proverbial red-headed stepchild of the three CET casinos in Jersey. The eventual opening of the Hard Rock may spell trouble for this property next year as they are doing worse with less competition! They are down about $1,100,000 for the first quarter in total gaming win.

Tropicana has shown a lot of success in wooing Carl Icahn’s former Taj customers down to the opposite side of the Boardwalk. Gaining 27.9% over the first quarter of last year for a positive revenue change of $18,309,756 in live gambling win is an indicator, but this most recent month, by far, has been the most impressive performance. The online product has gained almost twelve percent, but that’s actually the worst of those to have gained revenues. (Borgata online is performing worse than last year)

Caesars is having the second best quarter compared to last year in both categories. They are looking at 23.9% (+$15,493,283) which are numbers quite similar to what they enjoyed in March. Harrah’s has gained less than 2% in live gaming win, so they are steady and do not seem to be benefiting much from the closure of Taj. That’s not a surprise, no reason for former Taj players to be attracted to the CET properties.

4 carl Icahn

Resorts may perform the worst in raw dollars, but they have still gained 18.8% for +6.938 million dollars in earnings for the quarter as compared to last year. That performance puts them in third place for percentage gained and they seem to be enjoying having that end of the Boardwalk all to themselves. In terms of cold hard cash earned for 1Q17 compared to 1Q16, Resorts is fourth.

Borgata is fourth in percentage gains with +8.6%, and third in actual cash money at +14.203 million dollars. Of the seven Atlantic City casinos, Borgata accounts for 31.21% of all live gambling win this year while second place goes to Harrah’s taking down 15.23% of all live gambling win.

Golden Nugget thrived by doing everything they could to appeal to the customers that were disaffected by the several casino closures that took place in the city in 2014, but they do not seem to have drawn business from the former Taj as successfully. Barring substantial new revenues coming into the city, it seems that GN might be doing as well as it can at this point as is beginning to level off. Given that they have taken down slightly more than their fair share (about 1% more) of the revenue increase to come into the city, they seem to have attracted a few new former Taj customers, but not many.

Golden Nugget has only gained the fifth most money (+$2,206,381) and is also fifth in percentage gains for 1Q with +4.3%. While that may be a bit of a disappointment, the Nugget is smoking the competition in the Internet gambling market. Getting to watch the super attractive live (online) dealer girls as you make your way from the parking garage elevator inside the B&M Nugget is a hell of a good advertisement!

5 Tropicana Atlantic City

The former Revel, now known as TEN, has announced that they plan to open some hotel rooms around June but will not be operating as a casino during that time. Even though it never really seemed like a sure thing that TEN would have gaming operations, the current properties in the city can breathe a collective sigh of relief as they may not have any new gambling competition to worry about until Hard Rock opens next year. There were rumors that Hard Rock had been in talks with Straub, and despite Straub’s denials, Hard Rock International essentially confirmed that they had considered purchasing the former Revel from the Florida real estate tycoon.

If the first quarter represents the introduction to the year, then 2Q will be the rising action and the third quarter will be the climax as we see what Summer brings. It remains to be seen whether or not the economy immediately surrounding the city has simply improved resulting in more in-state and nearby visitors or if AC is now perceived as a more attractive destination than it had been. The picture that has been painted so far is a pleasing one, but it is Summer that will decide how AC performs for the year as we wait to see if they can pull in tourists.

Resorts seems to enjoy having that side of the Boardwalk to itself, but it had better enjoy it because they have as few as sixteen months remaining of not having a competing property right next door. It also remains to be seen how many former Taj customers have an affinity for the actual property and will be drawn back from Tropicana after the Hard Rock rehab and relaunch.

6 Caesars Atlantic City

Golden Nugget led the charge in Internet gambling revenues and performed second best in percentage at +85.5%! Resorts Interactive performed the best in percentage gains (+124.9%), but Golden Nugget is blowing them away with the $16,128,528 they are bringing in as Resorts has brought in just over ten million. Borgata is closest to GN in pure dollars, but even they have not surpassed the twelve million mark for the quarter. GN is running away with it!

Borgata is down 8.9% and has made 1.165M less over the first quarter of this year as compared to last. That’s kind of funny considering that now sole owner MGM has one of the most popular gamblification products out there with MyVegas powered by PlayStudios.

Internet Gaming is up 32.1% overall for the quarter which is just patently ridiculous. I can’t even venture a prediction as to when that train will slow down because it has certainly shown no signs of doing so anytime soon.

The most positive thing that can be said about the outlook for the city (and it’s very positive) is that the city is experiencing an influx of new revenues both live and online and are not merely redistributing the Trump Taj Mahal money. The live gaming revenues have been an especially telling sign of things to come, but we still need to see if those kind of increases continue through the Summer before we get too excited.

“Atlantic City compares extremely well and looks good for the future”

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