Atlantic City casinos slowly crawling up from the grave

Atlantic City casinos are slowly crawling back to life after their long pandemic lockdown, although one operator could lose some of its momentum following a recent court ruling.

On Monday, New Jersey gambling regulators revealed that the nine Atlantic City casinos generated combined slots-and-table-games revenue of $199m in August, a 30.5% decline from August 2019 but nearly $52m better than July 2020.

August’s slots revenue was down 30.8% year-on-year to $144.1m while table games slipped 29.8% to $54.9m. However, both figures represented significant improvements from July’s slots ($111.8m) and table ($35.6m) totals. For the first eight months of 2020, revenue is down 53.9% to $842.2m.

AC casinos were cleared to reopen on July 2 after nearly four months of inactivity due to COVID-19. But they’ve been limited to 25% capacity and, while the state’s governor announced last month that guests could once again smoke on the gaming floors, he rescinded that order just days later, leaving smokers fuming over this défense de fumer edict.

The Borgata led August’s revenue chart with $40.5m, down 43.7% year-on-year. Hard Rock Atlantic City took a smaller hit, falling 14.5% to $32.9m while the Ocean Casino Resort (OCR) posted the month’s only annual improvement, rising 1.4% to $24.4m.

OCR has enjoyed significant growth since its takeover by a New York hedge fund and its subsequent rebranding from Ocean Resort Casino. But a federal court issued an injunction last week preventing two OCR employees from luring high-rolling customers away from the Borgata.

William Callahan and Kelly Ashman Burke, the Borg’s former VP of casino marketing and executive director, respectively, started working at OCR this summer. The Borg’s parent company MGM Resorts launched legal action against the pair following the OCR’s hiring announcement, claiming that the two had violated non-compete agreements.

In addition, MGM claims that Callahan has in his possession an MGM-issued phone containing contact information for some of the Borg’s VIP gamblers, who collectively generated $25m in annual revenue for the casino. MGM showed the court phone records that indicated Callahan had contacted some of these VIPs since joining OCR.

US District Judge Gloria Navarro issued the order after concluding that there was merit in MGM’s claims. Navarro ordered Callahan to return the phone, told both execs not to contact any more Borg VIPs and ordered the pair to submit to depositions. A September 23 hearing has been set at which Navarro will consider whether to make the injunction permanent.

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