Atlantic City Casinos Tries to Cope Up With Weakening Economy

On January 31st, 2009, canceling Atlantic City casino’s smoking ban was not enough to solve the town’s dropping revenue. The seaside resort’s eleven casino facilities reported a $345.5 million in revenue for the month of November, down by 7.8% from the same period a year ago.

Figures that are released from the New Jersey Casino Control Commission showed that Atlantic City casino facilities won $228.4 million or sixty-six percent, from slot machines. The rest, which is $117.1 million, came from casino table games. For the first eleven months of the year, the total revenue was down by 6.7%. The number one gambling market in the US, Las Vegas, fared even worse. The Las Vegas Strip gambling revenue dropped for the tenth straight month in October to $475 million, down by 25.8%. For Atlantic City casinos, the emergence of slots parlors in Pennsylvania has taken a chunk out of its profit base.

The seven Pennsylvania casinos produced a total of $131.2 million last month. From January 1st, 2008 to November 30th, 2008, the seven slot machine parlors in Pennsylvania reported $1.49 billion in gross slot machines revenue. The state does not permit dealer-staffed casino table games. The state of Pennsylvania has a fifty-five percent tax on gross slot machine revenue, compared with the state of New Jersey’s gross slot machine revenue tax of 9.25%.

The gambling tax revenue in Pennsylvania and New Jersey goes to support different government programs. The weak economy and stiff regional slots competition were one of the reasons cited by Atlantic City casino gaming operators to lift the full smoking ban. 58 year-old Subash Arora, an anesthesiologist from Scranton said that the lounges were okay for socializing but you feel isolated.

But despite the ban’s delay, last month’s casino revenue were disappointing. 9 of the eleven casino facilities reported revenue drops, ranging from 30.1% at the Atlantic City Hilton, to 0.1% at the Trump Taj Mahal. Only the Caesars and Harrah’s Resort Casinos-which is both owned by Harrah’s Entertainment Incorporated of Las Vegas-improved, showing monthly revenue improvement s of 8.5% and 9.4% respectively.