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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

13 January 2004

ATLANTIC CITY -- Atlantic City casinos finished the year with a disappointing December, during which gross gambling revenue grew only 2.8 percent despite the addition of Borgata Hotel Casino & Spa. Their revenue take was $320.4 million.

Analysts and executives pointed to snowstorms in early December and the loss of one Sunday compared to the year-earlier period, but still they were expecting a better month ó especially considering an easy comparison to December 2002, when revenue was down 10.5 percent.

"Whatever all the factors were, that's still a disappointing number. I was hoping Atlantic City would be closer to the 8- to 10-percent range," said Jefferies & Co. analyst Larry Klatzkin.

The December finish gave Atlantic City 2.4 percent revenue growth for the year, marking the city's 25th consecutive year of revenue growth.

More than one-quarter of the industry's growth came from tighter slot machines. Casinos last year paid out 91.87 percent at the slots compared to 91.94 percent a year earlier. That gave the casinos an extra $29 million.

Klatzkin attributed the tighter hold to the rise of nickel slots; lower-denomination slots typically have a lower payout than higher-denomination slots.

For the first time in 23 years, revenue from table games took a bigger percentage of the industry's gaming revenue: 25.9 percent compared to 25.6 percent a year earlier. That was due to Borgata, which quickly established itself as the city's table-games leader.

Table-games revenue grew 3.7 percent last year compared to 2 percent for slots.

Only two casinos - Showboat and Hilton - reported revenue increases for the year, as the others lost business to Borgata. Showboat, up 2.3 percent, benefited from a 544-room hotel tower that opened in May. Hilton, up 0.4 percent, benefited from being most distant from Borgata.

The city's two independent casinos, Resorts and Sands, reported the steepest annual declines. Resorts, down 11.3 percent, removed one hotel tower and a portion of its casino floor to make way for a larger hotel expansion scheduled to open in June. Sands, down 11.4 percent, is trying to create a new identity after several years of management change.

For December, only Showboat reported a revenue increase, up 1.7 percent. Borgata maintained its No. 2 position on the revenue chart, grossing $37.9 million. Bally's was No. 1 at $45.4 million, down 4.9 percent.

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Boxing promoter Don King petitioned to withdraw his application for a gaming license, saying he does not want to answer Division of Gaming Enforcement questions about his possible role in a previous bribery scandal involving International Boxing Federation President Robert Lee.

The DGE said it will ask the Casino Control Commission to bar King from promoting any more fights in cooperation with Atlantic City casinos until he actually has a casino service-industry license. Typically, withdrawing a license application results in a one-year waiting period.

King has managed to promote four casino-sponsored fights in Atlantic City over five years without having a gaming license. He has done this through a pattern of applying and then withdrawing license applications, as just the act of applying allows a individual or company to start doing business with casinos.

King filed his request for withdrawal just 24 days after promoting a blockbuster card sponsored by Bally's at Atlantic City's Boardwalk Hall.

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Donald Trump's flagship casino is capitalizing on his television stardom.

Trump Taj Mahal is staging the $100,000 Apprentice Challenge, in which gamblers earn points toward the grand prize by selecting which contestants on the new NBC show "The Apprentice" are fired and hired by Trump.

The promotion began Jan. 1 and continues through April 16.

"We definitely wanted to capitalize on the fact we had a nationally televised show featuring our boss, Donald. It was a must-do," said Linda Powers, Taj senior vice president of slot marketing.

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A former Trump Taj Mahal floorperson pleaded guilty to attempted theft after devising a fraudulent player-rating scheme, authorities said.

Carmelo Aponte Jr. attempted to inflate the comps given to certain gamblers, even forging the name of a supervisor, and then pocking the difference between. He collected nearly $800 in comps as a result of the scam, authorities said.

The state's Casino Prosecutions Bureau said it is intensifying its efforts to catch employee scams.

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A member of the Casino Control Commission who was forced to leave without explanation when his term expired in December is being called back to duty.

Gov. James McGreevey renominated Ralph Frulio to the commission after a six-week absence. An administration official said Frulio's situation became lost in the government bureaucracy.

Frulio joined the commission last May, filling the unexpired term of Diane Legreide. The term expired in August, and Frulio had to leave after the 120-day maximum holdover period expired in early December.

Frulio was expected to be confirmed by the Senate this week and rejoin the commission soon after.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com.)