Atlantic City April Showers?

New Jersey Gambling Revenue for April, 2017

As we saw in last month’s report (for March) the New Jersey Gaming Commission saw quarterly results that indicate some serious increases in both live and online gambling compared to the previous year despite having one fewer land casino. The question now is whether or not those trends have continued for the month of April, and without further ado, here are the results:

The total gaming results for April of 2017 compared to April of 2016 were 211.7M as compared to 215.0M, which reflects a decrease of 1.6%. While this may seem like a bad sign for the continued improvement of revenues in the city, it is important to keep in mind that the YTD numbers as compared to last year are still positive and that April represents the first such decrease as compared to last year’s numbers.

The entire loss stemmed from land-based gambling win which was down 7.1M (190.9M) which represents a decrease of 3.6% as compared to the previous year. It is expected (and we will see later) that most casinos will experience an overall revenue increase regardless because the previous year’s numbers also included the gaming win for the Trump Taj Mahal which, of course, is no longer operating.

However, these stagnant numbers could potentially spell bad news (if they continue) for the soon-to-be Hard Rock Hotel and Casino that will take the place of the former Taj Mahal in the market projected to take place during Summer of next year. The opening of that casino, both the State of New Jersey and Hard Rock hope, will drive in a new market as Hard Rock will be able to utilize its customer base to market to individuals who currently visit their other properties, such as those in both Vegas and Florida. (Among others)

In the meantime, Internet Gaming Win is (predictably) up substantially and serves to largely assuage the losses on the live casino end of operations. The increase of 3.8M (to 20.8M total) for April of 2017 compared to the previous year represents gains of 22.6%.

The New Jersey Gaming Commission also mentions that the overall numbers remain strong for this year, even including live casinos, which are up 12.5M compared to the YTD for last year. After factoring in increases of 29.5% in the Internet Gambling Win for the year, the total gambling win numbers are up 3.8% overall YTD. Total gaming win from all sources for the year to date is 843.6M.

The baseline for how individual properties performed for the month of April, of course, is going to be the increase to Total Gaming Win after taking the Trump Taj Mahal out of consideration. In this sense, the overall increase as compared to last year was 4.2% as well as 9.3% in live casino win for the year overall.

New Jersey also reports the overall increase to Total Gaming Win (including Internet win) after taking the Taj out of consideration, but I consider that number irrelevant given the fact that the Trump Taj Mahal had no online presence last year in the first place.

The loss leaders (compared to last year) were table games on the physical casino side as well as online poker on the Internet side of things. In terms of table games, casinos experienced a decline of some 6.18M dollars which is down over eleven percent. Slot win also fell on the live casino side, but not as meaningfully as they were down less than one percent.

“Peer-to-Peer,” gaming on the Internet side, which basically just means online poker, plummeted almost $620,000 and pulled down overall revenue gains substantially with its 23.9% loss compared to last year. These numbers were more than offset by a 31% gain in other games which, naturally, makes up a much larger share (90.55% for April of 2017) of total online gaming win in the first place.

In terms of year to date revenues, all gaming segments (both live and online) are up by at least 1.2% (live slots) with exception only to peer-to-peer, down 5%. In other words, there’s a reasonable chance that the down numbers for April of this year are something of an aberration, especially when we consider the fact that 2016 over 2015 was the first year-over-year improvement in over a decade.

Without further ado, let’s see how the individual properties performed in both Internet and Live Gambling Win for April of 2017 compared to 4/16 and how they are running year-to-date:

Casino	Live 4/2017	Live 4/2016	+/- %	Internet 2017	Internet 2016	+/-%
Bally’s	17,164,046	18,127,758	(5.3%)	CET	CET	N/A
Borgata	58,451,270	55,978,951	4.4%	4,213,109	3,983,139	5.8%
Caesar’s	27,897,388	24,715,744	12.9%	CET	CET	N/A
Golden Nugget	18,071,420	16,692,696	8.3%	5,377,943	3,305,283	62.7%
Harrah’s	26,986,401	29,074,040	(7.2%)	CET	CET	N/A
Resorts	13,958,453	13,880,756	0.6%	3,775,370	3,478,108	8.5%
Tropicana	28,337,636	24,620,261	15.1%	3,939,115	3,056,349	28.9%
Caesar’s Interactive (Three Casinos, Technically)	N/A	N/A	N/A	3,516,489	3,157,870	11.4%

Starting out with Live Casino Gaming, we see that the two biggest losers (only losers, for that matter) are Harrah’s and Bally’s, two of the three CET properties.

In the case of Bally’s, down almost a million big ones compared to April of last year (and the only casino down more than one half of one percent in gambling win YTD) they declined about 21.61% (about 1.48M) on tables and despite slot machine win gains of 4.77% (about 523K) found themselves down nearly a million overall. Poker dropped by about ten grand, but that’s obviously not even a remotely meaningful source of overall revenues.

Harrah’s was absolutely devastated on table games compared to last year, down about 49.9% (3.669M) compared to April of last year. This was only partially offset by slot machine gaming win gains of 6.96% (gain of about 1.493M) through that revenue source. The overall result was Harrah’s being the worst performing property as compared to last year for the month of April down roughly 2.088M overall despite gains of 88K in live poker. The overall loss represents a decline of 7.2% compared to the month for last year. As we will see later, Harrah’s is the only other AC property down for the YTD, at -0.5%.

In terms of gainers, Resorts seems to have benefitted the least from the loss of its previous next door neighbor, the Trump Taj Mahal, and having that side of the Boardwalk to itself. Resorts gained only 0.6% overall in live gaming win as compared to 04/2017 and experienced the second slowest online growth, and second-worst dollars and cents online performance, at +8.5% and 3,775,370, respectively. They beat only the soon to be shuttered Borgata online product and growth and defeated only Caesar’s Interactive in dollars and cents.

Much like the two CET properties, Resorts also experienced a series decline in Table Games win as compared to the previous year, table games were down about 19.66% compared to the same month the previous year, which is a decline of about 585K. Fortunately for the property, that decline was slightly more than offset by their performance on the slots which saw them gain 6.08% from that revenue source which represents an increase of about 663K. The final result is relatively flat and does not compared well to their still strong YTD performance.

The perpetual leader in live casino gaming win, Borgata, found itself in fourth place in terms of live gaming increases/decreases on a percentage basis and third in terms of dollars and cents gains. The Borg was up 2.472M in total live casino win which represents gains of 4.4% for the month, overall, as compared to last year. Unlike the previous casinos, Borgata experienced gains in all aspects of live gaming (except poker) with the most notable being an impressive 15.4% gain (+2.05M) at the tables along with a more modest 1.21% (less than 500K) increase on machines. At +$229,970, their 5.8% increase in Internet Casino Win was the most tepid of all operators as MGM prepares to roll out a different online casino product later this year.

The 8.3% increase in live gaming win for the Golden Nugget comes in third in terms of percentages while they, once again, lead in Internet Gaming win gains with an insane 62.7% increase compared to April of last year. The gain of over two million dollars is driven by second-to-none marketing for their interactive product as well as a Live Table Game operation that is second to none. The former Trump Marina also gained in both of the major live casino segments with table games up 17.8% (about 716K) and slot gains of 5.34% (about 673K) with poker down very slightly. The overall live gain of roughly 1.4M ranks fourth in terms of dollars and cents.

With overall live gaming gains of about 3.182M, Caesar’s comes in second for April of 2017 compared to the same month of the previous year both for dollars and cents increases as well as in terms of percentage. In the case of that property, the gains are consistent in both table games as well as slot win with a 12.1% increase (1.14M) in the former and a 13.4% (2.04M) improvement in the latter category.

Taken as a single entity, the CET properties made $72,047,835 in total live gaming win for April of 2017 compared to $71,917,542 for the previous year, which represents gains of barely two-tenths of one percent overall. (0.18%) This weak increase is led largely by the table games decreases at both Harrah’s and the very redundant Bally’s.

Perhaps not surprisingly, given Carl Icahn’s ownership and ability to market to former Trump Taj Mahal players, Tropicana leads the way in terms of increases in both dollars and cents as well as percentage for live gambling win. The 3,717M gain on the live casino side (15.1%) represents the largest increase in the live gaming segment, but falls just short of 25% of the live casino total gaming win that the Trump Taj Mahal had accounted for the previous year. In other words, Icahn has not secured as much of what was once his market as one might expect.

Tropicana seems to have not been successful in marketing to the one time Table Game players of the former Trump Taj Mahal as they actually experienced a decline in April 2017 in that regard as compared to the year before. Table Game revenues fell nearly 1.1M month-to-month!!!

In terms of Internet Gaming win, CET Interactive was middle-of-the-pack in both percentages and dollars and cents.

Let’s look at the year-to-date numbers:

Casino	Live 4/2017	Live 4/2016	+/- %	Internet 2017	Internet 2016	+/-%
Bally’s	64,509,524	66,581,606	(3.1%)	CET	CET	N/A
Borgata	237,134,483	220,459,250	7.6%	16,080,750	17,015,894	(5.5%)
Caesar’s	108,239,500	89,564,573	20.9%	CET	CET	N/A
Golden Nugget	69,306,700	65,821,597	5.3%	21,506,471	11,999,843	79.2%
Harrah’s	114,211,824	114,766,940	(0.5%)	CET	CET	N/A
Resorts	57,774,474	50,758,410	13.8%	14,189,918	8,108,838	75%
Tropicana	112,299,062	90,271,931	24.4%	14,136,726	12,169,577	16.2%
Caesar’s Interactive (Three Casinos;Technically)	N/A	N/A	N/A	14,195,779	12,573,748	12.9%

Overall, the Live Gaming segment (including the Trump Taj Mahal) is up 1.7% YTD and is up 9.3% if the Trump Taj Mahal is not considered. Borgata, Caesar’s, Resorts, Tropicana and Golden Nugget are performing ahead of that baseline with only the two properties with decreased YTD Gaming Win (Harrah’s and Bally’s) performing worse. The terrible month at the table for Harrah’s seriously cost them as, for the first quarter, Bally’s was the only property with decreased live gaming win.

Internet Gaming is up 29.5% overall, with both the interactive Golden Nugget and Resorts products performing substantially better while the others do not meet the average gain.

Borgata Interactive is performing especially poorly, down 5.5% in win despite the overall gains for April in Internet Gaming Win. However, we finally have an answer for this as it has been announced that MGM plans to launch an entirely new online casino product later this year and may not be so much concerned with its existing product for the time being.

Getting back to Live Gaming Win, the Tropicana’s gain YTD of 24.4% comprises a bit over 40% of what was once the live gaming revenues of the Trump Taj Mahal last year, so the 25% composition of those revenues for April tends to indicate that the Tropicana may have been successful in getting former Trump players, but not necessarily so great at keeping them around. It will be interesting to see if that is the start of a trend when we get to the last quarter of the year for which there was no Trump Taj Mahal last year, either.

Conclusion

Despite the overall 1.6% overall gaming win decrease for April of 2017 compared to last year, even after including online gaming (live casino win was down 3.6%) I see no immediate cause for alarm as the YTD numbers still have AC ahead 1.7% in the live segment and 3.8% overall as online gambling leads the way with its 29.5% YTD increase.

While we would have certainly liked to have seen another month of continued gains for the city last month, a 1.6% decrease is hardly unnerving and may have simply come as a result of incredible Table Games performances, particularly at Harrah’s, last year. As Summer nears, a season in which being down 1.6% would be much more meaningful (in dollars and cents terms) we will learn much more about Atlantic City’s future.

In the meantime, Atlantic City is still going into May with strong year-to-date numbers and no immediate fears of any casinos being opened in the northern part of the state, given the failure of that ballot measure last year.

The most surprising aspect of the numbers to me was Resorts’ tepid gains for April of 2017 despite their strong live casino YTD win numbers as well as the fact that they now have that side off the Boardwalk to themselves. We will have to see what the Summer holds but, surprisingly, they may actually benefit from the opening of the Hard Rock Hotel & Casino AC next year, at least in terms of foot traffic on their end.