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AC revenue way down

Discussion in 'Non-Vegas Hotels & Casinos' started by Bernie2, Jan 17, 2015.

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  1. Bernie2

    Bernie2 High-Roller

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    In 2014 AC took in $2.74 B the same as in 1988 and the $2.74 B is down from the $5.2 B in 06. The revenue in 2014 got a boost of $122 M from internet gambling. Wondering what AC will do in 2015. The saga continues.
     
  2. lithium78

    lithium78 High-Roller

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    It probably didn't help that AC lost four of their twelve casinos this year. The Showboat was still profitable too when CET closed it down. The biggest problem AC is facing is that Pennsylvania built their own casinos and AC didn't do enough to turn themselves into a "Vegas East Coast" by bringing in shows and attractions and improving air service. It's still a fun place to go, but there is so much more they could do to improve the experience.
     
  3. bdautch

    bdautch High-Roller

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    I totally agree with you about PA, but let's not forget about the rise of casinos in MD, either. I live in DC, and all it takes is a $6 train ride and a quick cab over to Horseshoe Baltimore. Like a lot of people who live in my city, I have no car. So Atlantic City was always about $300 away by the time you rented something decent, paid gas and egregious tolls in MD, DE, and NJ, parked, etc. I can whittle that down to about $30 round trip by going to Baltimore. If I want to stay overnight, I can through CET, and if not, I just take a late Amtrak home for like $12. Add in the fact that Charm City is more well-rounded than AC is, and it's both an easier trip as well as a better one overall.

     
  4. jerseyguy

    jerseyguy VIP Whale

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    Five out of eight casinos had revenue gains despite the overall number being down. Borgata,Trop and GN had double digit gains.
    2015 should be an interesting one, apparently one of CET'S two divisions filed bankruptcy ,the one that controls Caesars and Ballys. Article I read stated that Ballys is on the bubble for closure.
    It claims that Caesars wants to split the Hotel Operations from the Casino operations running the Hotels as a Real Estate Investment Trust (REIT) and leasing space to the Casinos.
    Something for you investment guys to ponder.
     
  5. Breeze147

    Breeze147 Button Man

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    They should have built the casinos in Wildwood. Building them in Atlantic City was like building them in downtown Camden. JMO
     
  6. lithium78

    lithium78 High-Roller

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    A lot of the gains by GN and Tropicana came from Showboat customers that switched their allegiances away from CET. GN and Tropicana aggressively marketed to the Showboat's former customers and they both offer entertainment that is closer in tone to the rock 'n roll that used to be featured at Showboat.
     
  7. Piggylane

    Piggylane Well-Known Member

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    Breeze points out something the PC crowd never wanted to acknowledge. The area around the casinos was very sketchy while AC was being built and in it's heyday. I traveled extensively from Mass to Philadelphia and Baltimore in the 1980's and 1990's and many of those trips had, of course, side trips to AC. The Boardwalk was brightly lit, relatively OK but nowhere as nice as say the Boardwalk in Ocean City, MD. Lots of pickpocketers, beggars and just two streets away from the casinos it was rent by the hour motels, run down apartment buildings, drug activity and little Police presence. I got lost a couple times and really regretted it.

    They tried several times to clean it up but for whatever reason not much changed. The last time I visited, probably 2005, it was cleaner but not by much.

    Meanwhile MD, PA and many other States took a different approach: place single casinos in diverse geographic areas to spread the positive and negative impacts. That seems to be working.

    AC will not die, it will probably be halved again before it reaches an equilibrium it can support. It's social problems are not unique to the area but endemic all through NJ as it struggles with one of the highest taxed populations in the country. How and why that happened is beyond me and surely not a discussion for this board.

    I certainly wish AC well and hope for the best for the employees of the casinos because they have families to support but boy it sure looks like a dim future there.
     
  8. hammie

    hammie VIP Whale

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    They took in $2.74 Billion and that ain't hay. Agreed, it's half of what they won at the height of the market, but with the exception of Harrah's and Borgata, each remaining property has gone through restructuring (Taj has had 4 bk's) so they should be profitable with lower revenue.

    As for being approached by drug dealers, panhandlers, rookey-dukes, flotsam and jetsam of society, this hasn't happened to me in any trip to AC. There are still 8 casinos, so I can bounce and go to another property if I'm getting hosed. I can't do that in any of the PA casinos which are closer to home. The reports of the death of AC are premature.

    I was recently in Portland, Maine doing some solo bar hopping a couple blocks from the arena, I was about the only one walking around at 10:00 pm and someone approached me to sell weed. Never happened to me in AC.

    Also, something has been bugging me, it regards second and third hand comments about AC that are highly negative. Stop. Most if not all of the first hand trip reports have been positive. I don't want to hear about something that happened to a co-workers dog groomer on the boardwalk.
     
    Last edited: Jan 17, 2015
  9. totalee

    totalee Tourist

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    Last time I was in Atlantic City Off duty police officers were on the Boardwalk handing out fliers about how unsafe the City was. I think they thought it would help them get a raise, BUt keeping folks away like that doesn't help their job security. They also have crazy fees when you stay at a Hotel that from what I understand don't go to helping the city. I think a comp room should be free free, charging those taxes on a room you think is free helps keep more folks away and hurts the City more the extra 20 bucks a day or so help.
     
  10. lithium78

    lithium78 High-Roller

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    You must be one of those people who drive down I-95 and think you know what Jersey is like. New Jersey is one of the wealthiest states in the nation. We have more money than we know what to do with -- which is why I like to spend it on gambling and other ways to party. And Atlantic City is not nearly as bad as people think it is. As long as you don't go around flashing big wads of Benjamins like a rube, you'll be fine -- but that goes for pretty much anywhere in the world. I've never had a single bad incident in AC on the Boardwalk or anywhere in the tourist area. If you are wandering off into Back Maryland and the other ghetto areas of town, then that's your own problem. It would be like driving down the Cross-Bronx Expressway in NYC and declaring that's what all of New York is like and then walking around in Cypress Hills in Brooklyn and expecting to be safe.
     
  11. lithium78

    lithium78 High-Roller

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    On my recent visit to Caesars AC, I had to pay $13/night in taxes and resort fees. That is much, much cheaper than what you get charged in Vegas or pretty much anywhere else. Just the resort fee in Vegas is at least $25/night. And if you really don't want to pay it in AC, you can use rewards credits or if you are Diamond and above you can get it waived.

    The off-duty police officers were scare-mongering, because Atlantic City is cutting their city workforce because their budget is ridiculously bloated. It's a city of fewer than 40,000 people yet their municipal budget is $260 million. That is absolutely insane.
     
  12. Kickin

    Kickin Flea

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    I agree with lithium that this is a pretty wild statement, almost sounds like something from Fox News. Highest taxed? In what way? State income tax in NJ is inline with the surrounding states and lower than some like NY (where we also have city income taxes). Property taxes are on the high side but its one of the wealthiest and most densely populated states in the country, it should be higher than other states with sparser populations.

    As far as budget issues go I think the media loves to sensationalize any prominent state (and politician) that is dealing with budget deficits. But they don't care about confusing an accounting issue with an economic issue. California was the whipping boy for the media and some politicians just a few years ago but look at how well its doing today, yet the critics are barely acknowledging it. Cities and states with strong tax bases and strong industries are never really at risk. AC has been losing both those things for years, but not NJ as a whole. I have no idea what AC can do to turn around especially because it always feels like they aren't even trying.
     
  13. Patripman

    Patripman Low-Roller

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    How true about Pennsylvania casinos taking much of AC's business. When Pa approved casinos in 2006 I along with others knew AC's days were numbered. Hear is my observation from a western Pa point of view.

    Before 2007 or before the opening of the Rivers, Meadows and Presque Isle Downs casino there was 24 hour a day bus service to AC and 2-3 day trips were available any day of the week from the western part of the state. To get a reservation one had to call weeks even months ahead to get a seat, now today there is virtually 0 buses operating to AC and if you find a trip it is a special package. I am not sure how many here know the Pittsburgh region but gambling seems to be in the blood of many people. The local bars, private clubs even small mom and pop stores had sections of video poker and slot machines, some still do today. Although considered illegal they thrived. I was a member of a veterans club back in the 1980's and they had what I consider one of the best casinos in Pa. 7 poker machines, 5 video slot machines and 3 of the best conditioned bingo pinball games found anywhere all gambling devices. To get onto any of these games one had to wait hours.
    I can remember opening day for the Meadows Casino (which opened in a temporary tent structure) the traffic getting to the place was lined up for miles and people were parking their cars anywhere they could, I knew that day that AC was in trouble. The people here now have 3,000 slot machines at their disposal with a short drive from the homes. Then The Rivers opened and that is when the bus service to AC came to a screeching halt. There was an article around 2010 that told the story of how Pa casinos will one day be the "last nail in the coffin" for AC gambling and every word was true.
    Here is where Pa ranks for gambling nationwide. #2 in casino business and income #3 state lottery game purchases. The article further stated that 62% of AC gamblers were from Pa., that figure alone should of been a red flag to the owner/operators of AC casinos but they shrugged off the numbers.
    In my opinion you may see further closings of 2 more boardwalk casinos, but with that said Pa is seeing their casino business slump. Only 2 of 12 casinos reported positive numbers for 2014 (Lady Luck and Valley Forge) 2 of the smallest properties in the state.

    P
     
  14. jerseyguy

    jerseyguy VIP Whale

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    I'm happy living at the shore area,my property taxes are a little over 4k in a nice upscale retirement community within easy reach of just about anything I will ever need or want to do. I know the bedroom suburbs near NYC are really heavy on property taxes,but incomes are generally higher than most places.
    I have zero desire to move south or west or to De or Pa,but I realize that people are retiring and leaving Jersey in record numbers. I dont know if they keep statistics on the number of people who move to a low cost of living area and find out after a while that its a crap area overall and move back here.
    Like Partripman said,when they opened the new Pa casinos people flocked to them the same as when a new movie opens and I still meet people from PA in AC.
     
  15. BeeeJay

    BeeeJay President of The Red Lobster Hostess Satisfaction

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    They need to put Nucky Thompson back in charge!
     
  16. hammie

    hammie VIP Whale

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    I lived in South Jersey and still have friends and family there and I do business with clients in North Jersey. Regarding property taxes, a friend has a modest 3 bedroom single family home on a small lot, probably worth $350k. He is paying $10,000 a year in property taxes. Another friend lives in Haddonfield and pays $12,000 a year in property taxes on a 3 bedroom single.....great schools though. Property taxes in NJ fund school budgets in a higher proportion to other states. NJ is the most densely populated state and there are over 560 municipalities and over 600 school districts. Each municipality and school district has to provide services and thus has high administration and enormous pension costs. An aquaintence worked for the county court system and retired after 20 years with a $56k pension and health benefits, he was 52. If this were a business, it would be unsustainable.

    As for strong industries in NJ, many companies are abandoning the state due to high taxes. Mercedes just left Montvale for Atlanta, BMW will probably do the same. L'Oreal recently relocated a plant to Mexico, I lost count of the number of pharmaceutical plants that closed in NJ. Those remaining businesses have their hands out looking for abatements, Subaru just received a $100 million package to relocate to Camden and not leave the state.
     
  17. lithium78

    lithium78 High-Roller

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    If you don't like paying high taxes, then you can always move to a Southern state. Just don't plan to have any children there if you do, because they will end up as dumb as a box of rocks because their schools have no funding and they will end up with hobbyist teachers from Teach for America instead of real professionals. In New Jersey, you pay for the quality of life.
     
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