I try not to get too caught up in monthly and quarterly casino revenue reports because short term success or failure doesn’t always mean the same long term. However, I’m currently fascinated by how bad business is for Revel in Atlantic City. The facts are brutal.
The good news for Atlantic City? The 11 casinos that were in operation last summer saw their profits increase by 2.3 percent in the third quarter of this year, non-gambling revenue was up, and hotel occupancy rose.
The bad news? The 12th casino, Revel, is losing a ton of money…
…Revel, which has struggled since it opened in April, reported a gross operating loss of nearly $37 million for the quarter.
The article expands on how much of a drag on Atlantic City revenue Revel has been.
But when Revel is included, things go south in a hurry. Revel, which has struggled since it opened in April, reported a gross operating loss of nearly $37 million for the quarter.
With Revel in the mix, Atlantic City’s casino profits as a whole declined by nearly 18 percent from the same period last year, to $149.5 million.
I’m surprised with two things. A) That Atlantic City casinos are performing pretty well as a whole and B) How awful Revel is performing.
I don’t think the overall positive movement signifies that “Atlantic City is back” in a casino boom era but the bleeding may be slowing and turning around a little bit. This is a positive sign that I’ll be able to visit casinos there next year. I’m not sure the Atlantic City market will ever be what it was 10-20 years ago but there is a place for it.
On the other side, I understand that Revel is an entirely new concept to Atlantic City casinos but the poor returns are very bad and worse then anyone could have imagined. In the short term there should at least be a curiosity about Revel to mask a lack of long term interest in the casino.
Atlantic City may not have the most hip or young casino clientele but the adjustment to a new concept has to be slower than expected. Non-gaming revenues are up this year and that can very likely be attributed to Revel’s effect.
Cosmopolitan of Las Vegas would always tout that their food and beverage or nightlife was making money giving hope that the gaming business would follow. While it seems that Revel has a similar formula, I haven’t seen anything similar to support that they’re going in the right direction.
I try to be pragmatic about calling any business a failure in 6 months so I’m curious to see how things change next year.