Atlantic City

Interesting article from the NY Post on positive changes going on in Atlantic City - non casino related.

https://nypost.com/2018/08/15/down-on-its-luck-atlantic-city-seems-poised-for-a-comeback/amp/

 

A great article, thanks for sharing. It’s one thing for the Casino Reinvestment Development Authority to take its casino funded budget to invest in a project. But when you have developers and individuals investing in property and improving them, that’s a great sign of confidence.

I recently drove past the apartment development referenced in the article, it looks really nice, I hope it’s a success. We go to the beach on the south end of AC, it’s a nice neighborhood, the beach is never crowded.

I believe Atlantic County had one of the highest forclosure rates in the USA for a couple of years. There are still some folks with negative Home equity and I spoke to a local realtor who specialized in foreclosures, she confirmed that things are picking up down there.

 

Oceans will be fine, they have the best pool, the best hotel the best night club and best overall entertainment, if they focus more on entertainment they'll be there forever, now Ballys on the other hand should have some concern, cause their hotel is probably one of the worst in AC

 

-Oceans probably does have the nicest pool but that only counts 4 months out of the year.
-Not sure if they have the best club there a handful of other very popular clubs around town( that is a small segment to go after anyway)
-Best entertainment, no way. Borgata and Hard Rock have them beat by a mile.

I hope they can make it work and keep Oceans open. Just because of the shear size of the joint it’s a big nut to make every month. Especially when a place like the Golden Nugget that is 1/4 the size is making more money than you.

 

I just said on another board that I am seriously thinking Ocean is in a year long soft-opening. Bad moves out of the gate aside, they opened without marquee establishments (Wahlburgers, Cereal Town), sans a planned buffet (arriving winter), no family fun center (getting there, but in progress), and about 12 unfinished floors that they said would be finished in the first year. Yup, it's pretty clear. And to be fair, as has been stated, they are working from a much better position (i.e. no huge debt load). The hotel portion has been packed, even if the gaming portion hasn't been completely. The tables have been hopping a bit, but the slots (a major profit driver, naturally) weren't. I think a big problem is that they are saddled with the stench of Revel, and many people can't wash that off.

Here's what I think they're doing well so far aka better than Revel:

-WAY more transparent earning than Revel, and I'm glad they opted for the MLife-style system of points/tier points/comp dollars. I do not like the old Borgata Rewards/Hard Rock comp dollar system.
-Near immediate communication after the trip. In less than a week they say, "hey, here's a little somethin', and here's your room offer". Hard Rock just sent me a freeplay e-mail. No rooms, no nothing. Well, they do send me concert presells and "earn $1 get this gift" emails. Speaking of which...
-Attractive promos. Listen, I LOVE Hard Rock, but those promos don't speak to me, though I know they do a segment of the population. What does appeal to me is "earn $5 in comps, get a $25 bonus" every Tuesday in September or get a 5X-20X slot point multiplier every Monday.

They need gamblers to survive the off season, make no mistake, and despite the bad moves, I think they're trying to make it appealing. I just have a feeling that being what Revel wanted to be may be exactly propels them in the summer and gives them lasting life. Give gamblers the run of the joint from October to April, and let the (paying) resort folk eat it up the rest of the way. I just got back from two nights there yesterday and the relaxed vibe was exactly as I remember it from my last stay there. I'm at Hard Rock the end of September, but I'm definitely squeezing in Ocean again in a few months.

 

The difference between Oceans and some of the other properties are that Oceans isn't a public company, so as long as they have some kind of profit, they wont close. Caesars on the other hand...

 

I just spent the weekend at oceans. I managed to get two video poker handpay and a hundred something comp dollars.

I really think comp dollars are easy to attain at oceans but since there isn't a lot of retail, not sure what I can do aside from eat and spa

 

AC had a nice August, with brick and mortar up 20 pct compared to August 2017. Hard Rock took in 30.8 million (4th place behind Borgata, Trop, and Harrah's) while Oceans took in 19.6 million (placing it ahead of Resorts and Bally's). Golden Nugget was up 3 pct, Borgata and Caesars up less than 1 pct, while Harrah's, Resorts, and Trop were down between 3-4 pct. Bally's was the big loser, down almost 11 pct.

Sports betting wise, the Resorts Digital operation took over half of the $5.2 million AC sports wagering revenue. Borgata did 850K and Oceans 520K. Meadowlands did over $3 million, while Monmouth did close to a million.

 

This is great news, I hope the new sports book will help Bally’s, I would hate to see this casino close. It looks like mobile sports betting is the winner here.

 

Bally's and Caesar's help CET so long as they make enough to cover the operating costs. They're essentially loss leaders. Also, it's great to see Harrah's still holding it's own despite the two new properties.

 

Also, interesting to see that Hard Rock took in less in August and Oceans took in more when comparing to July. Oceans is here to stay from what I hear:

Bruce Deifik, owner and chairman of Ocean Resort, said he “couldn’t be more pleased” with the reported figures because unlike the property’s former occupant, Revel Casino Hotel, his new venture is EBITDA- (earnings before interest, taxes, depreciation and amortization) and cash flow-positive.

 

Hard Rock should have good numbers for September, thanks to Drake. NY Post Page 6 says he went to the High Roller room after his gig early Sunday AM. Lost $200k.

 

In completely unrelated news, Drake has suddenly announced 3 more concerts at Hard Rock this year.... to pay off his marker...

 

A friend saw Drake at Daer, said it was the worst experience. Packed like sardines with General Admission tix, multiple foot stomps.

But that’s one good way to pay off a marker, sing for your supper.

 

Not too sure about that. Last year Drake averaged over 1.5 mill per show. He probably considers the 10/15% loss of his nightly take at Hard rock, his gambling tithes!

He definitely aint missing "supper"!!!!

http://www.xxlmag.com/news/2017/01/drakes-summer-sixteen-tour-highest-grossing-hip-hop-history/

 

Singing for your supper, it’s just a metaphor.

Drake Ticket holders arrived at 11 pm and it was reported he waltzed in at 3 am.

 

And still took home 1.57 million! Not 1 person left before he showed up either!

 

Yea, people were talking about this when I was there two weeks ago, LOL. The worst part is that he lost it in less than an hour.

 

A little bit of good news in September, it looks like the overall casino revenue jumped 15.5% from September 2017. This includes sports betting and internet gaming. Now as you peel back the layers of the onion, the year to date comparison year over year “casino win” is up only 2%. This excludes internet and sports betting.

The other glaring item is that Caesars monthly casino win dropped 23% from September 2017. The Borgata was down over 13% in this same period. But the overall casino win for the market was up 7.7% for September.

Really strange that Ocean Resorts is bringing up the rear and that the 40 year old Resorts beat it out by a nose. I read that the owner of Ocean claims that his property is generating positive cash flow and he’s happy with the results.

He also said “my fish is fresh”.

https://www.nj.gov/oag/ge/docs/Financials/PressRel2018/September2018.pdf

 

I'm glad you checked, since I forgot too LOL. Up 15.5% from Sept 2017. And August was up 22.5% compared to last as well. I'd throw out the LYTD stat though. Hard Rock and Oceans have only been live for a few months. That leaves 6 months of the exact same old same old in AC since both joints went live June 28th.

"Total gaming revenue for July, August and September increased by 16.5 percent, or $123.5 million, this year over the same months in 2017. When the $21.4 million in revenue generated by Atlantic City casino sports books is subtracted, the market still grew by 13.7 percent over last year."