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Atlantic City casino profits fall

18 May 2007

ATLANTIC CITY, New Jersey -- As reported by the Press of Atlantic City: "Casino profits fell nearly 6 percent in a sluggish first quarter that reflected tougher competition from surrounding states and an expensive marketing war that has two of the biggest operators in town fighting for customers.

"The shrinking profits offer the latest evidence that newly opened slot parlors in Pennsylvania and New York continue to steal customers from Atlantic City's lucrative feeder markets.

"...Overall, gross operating profits slumped 5.8 percent to $297.4 million and net revenue dropped 3.1 percent to $1.16 billion in the first quarter, according to figures released Thursday by state gaming regulators.

"...Seven of the 11 casinos had lower operating profits in the first quarter, with the Atlantic City Hilton Casino Resort suffering the biggest drop, at 29.1 percent. Only Resorts Atlantic City, Caesars Atlantic City, Tropicana Casino and Resort and Trump Taj Mahal Casino Resort had a higher quarter.

"...Although it is still early in the year, if trends hold Atlantic City will suffer its first ever annual revenue decline since casino gambling began in 1978.

"...While extra competition and chilly weather were factors in the first quarter, the figures show that casinos also have themselves to blame for lower operating profits. The amount of money spent by casinos on marketing gimmicks and promotional giveaways to lure customers rose 2.1 percent to $388.8 million, cutting into the bottom line..."

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