Atlantic City suffers February hiccup; Caesars K.O.’d in Korea

All good things must end and, in the case of Atlantic City, a pretty steady comeback hit a pothole in December, with business down 2%. Even Borgata ($58 million) was down a percentage point. Citywide, slot revenue was actually up to $132 million (+1.5%) but casinos took it on the chin from table games. Grossing $52 million, they were down 9%. Borgata was schizoid, down 5.5% in slot revenue despite 3% more coin-in. At the tables, revenue and wagering were both down 12%. The bright spot for the city was sensational Internet-gaming growth, up 27% to $19 million.

Carl Icahn‘s Tropicana Atlantic City vastly outperformed the market, up 28% to $28 million. Harrah’s Resort led the Caesars Entertainment trio in dollars grossed ($29.5 million), although its revenues were flat year/year. Caesars Atlantic City was up a point, grossing $23 million, while Bally’s lost 5%, grossing $16 million. The Mohegan Sun folks had a sensational month at Resorts Atlantic City, improving grosses by 21%, for a tally of $15 million.

While we sympathize with Glenn Straub‘s frustration at dealing with New Jersey bureaucracy, it comes at a price. Resort weather is drawing nigh and Revel has no gaming license, nor much prospect of becoming an operational casino, let alone with brand equity. We wouldn’t rule out a Straub flip of the asset, perhaps to Bart Blatstein or ambitious Hard Rock International, but that just prolongs the timeline.

* Back when Ohio casinos were being legalized, the death of Detroit gambling was greatly exaggerated. Almost all Motown gambling halls did well last month, with a combined gross of $117 million. MGM Grand Detroit was up 2%, MotorCity Casino was flat, while Greektown Casino was down 1%. Dan Gilbert seems to have the reverse-Midas touch.

* That’s the end of that. Lippo Ltd. has pulled out of a joint venture with Caesars Entertainment to build a resort in South Korea. The move is attributed partly to tensions brought on by the deployment of U.S. missiles in South Korea. As a result, punters are heading back to Macao, despite the greater government oversight they will have to endure. The breakup will cost Caesars, wobbling out of bankruptcy, $23.5 million. Caesars has turned to Guangzhou R&F Properties Co. Ltd. to try and keep the project viable.

* Sheldon Adelson has found an ally in his fight against Internet gambling in Pennsylvania. The chairman and CEO of Parx Casino, Robert Green and Tony Ricci, are trying to raise fears of cannibalization in Harrisburg. Their testimony was countered by that of several other casino executives. Green and Ricci failed to quantify their claim, which meant Caesars Senior Vice President David J. Satz was able to trump them with evidence that 80% of the company’s New Jersey online-poker players were from outside the company’s database. “They’re adding to the pot, they’re not subtracting from the pot,” added Amaya Vice President for Government Relations Nicholas Menas. Adelson, if he has indeed sold Sands Bethlehem, wouldn’t be out of the state for at least for six months and a vote on Internet gambling is likely for April or May, giving him plenty of time to make mischief.

In other news, Isle of Capri Casinos is really struggling at its Nemacolin property, losing an average of $1.5 million a year. Executives blame the $10 admission fee charged to patrons, as well as completion from Golden Entertainment’s resurgent Rocky Gap Casino. Isle Nemacolin wants to trade the admission fee for a guaranteed $1 million/year levy to the state.

* Correction: Yesterday, I mistyped that Adelson wants to “outlaw state laws [sic].” What I meant was that he wants to outlaw online state lotteries, still an overreach by any measure.