More news from Atlantic City, none of it good. From NJ.com:
Resorts Atlantic City, the nation's first casino outside Nevada, says it may not survive; another Atlantic City casino hasn't made a loan payment since last summer; and three others are in bankruptcy court.
Atlantic City's 11 casinos have been struggling for more than three years. Financial documents filed with the state this week show just how bad things have gotten.
The news was worst for the two casinos believed to be the most endangered: Resorts Atlantic City, which was taken over by its lenders in December, and the Atlantic City Hilton Casino Resort, which defaulted on its mortgage in July and could be headed for the same fate.
Resorts, formerly owned by hedge fund Colony Capital, based in Los Angeles, told New Jersey officials in a quarterly tax return that its financial challenges “raise substantial doubt about the company's ability to continue as a going concern.” It said three major storms this winter made even its projections from November look too optimistic, and “the company will be subject to severe cash shortages.”
via Atlantic City casinos struggle against tough economy | – NJ.com.
As the 2009 numbers come out, it’s clear that things are, in fact, going very badly for the city’s casinos. Casino profits fell by more than a fifth in 2009.
We’re getting close to the point where nothing will turn the ship around, so to speak, in the near future. I’ve said it before, and I’m saying it now: somebody in the city had better find a way to get more people to visit and spend money. The Borgata’s doing well, all things considered–they actually boosted their profits by cutting expenses. But there’s a very real possibility that three casinos could close outright.
I’m working on a report about historical AC slot machine performance today, and have found some interesting trends. When the casinos opened, the machines were outrageously tight–14.4% hold for mostly quarters and dollars. The hold has come down a great deal, though, and since 1990 has actually fallen by nearly 2 points, while Nevada’s has increased by about a point. Nevada slots are still looser, though.