Q2 profits up 28.3 percent in slimmed-down Atlantic City casino market; Taj Mahal lone decline

Industries Associated Press

Less competition has led to greater profits for most of the casinos that survived a painful shrinkage of Atlantic City's gambling market last year.

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Figures released Monday by the New Jersey Division of Gaming Enforcement show seven of the eight surviving casinos posted increases in gross operating profit in the second quarter of this year.

Collectively, the eight casinos posted an increase of 28.3 percent in gross operating profit, which reflects earnings before interest, taxes and other charges. Only the Trump Taj Mahal, which is in dispute with its union over the elimination of key employee benefits and could be hit with a strike soon, posted an operating loss in the quarter. It saw a $902,000 loss, compared with a nearly $1.8 million profit in the second quarter last year, a decrease of more than 150 percent.

In April, May and June of this year, Atlantic City collectively earned $132.1 million, compared with $103 million in the same period last year.

Four of the city's 12 casinos shut down last year — the Atlantic Club, Showboat, Trump Plaza and Revel. When those four are included in the comparison, the increase in gross operating profit swells to more than $59 million because unprofitable casinos that were on the verge of closing are part of the calculations.

Gross operating profit reflects earnings before interest, taxes, depreciation and other charges and is a widely accepted measure of profitability in the Atlantic City casino industry.

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The most eye-popping increase came at the Golden Nugget, whose $7.7 million operating profit was up more than 902 percent from the $776,000 profit it posted in the second quarter of 2014.

Resorts saw a $4.8 million operating profit, up 153 percent from the second quarter of 2014.

For the first six months of the year, the surviving casinos have a gross operating profit of $213.4 million, up 27.4 percent from the first half of 2014.

Casino hotel occupancy for the second quarter was 84 percent, an increase of less than 1 percent from a year ago, with the average room costing $101.81. The Borgata had the highest average room rate for the quarter at $132.43, while Resorts had the cheapest at $79.62. Caesars had the highest occupancy rate, nearly 94 percent, while the Taj Mahal had the lowest at less than 68 percent.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC