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Atlantic City Casinos Strong in 2002

"Despite low revenue growth, the casino industry set apparent records last year for net revenue, gross operating profit and profit margin, according to Casino Control Commission figures released Thursday.

"The 12 casinos produced gross operating profit of $1.2 billion, up 9.5 percent, on net revenue of $4.2 billion, up 2.8 percent.

"…`Right now the industry is very healthy,' said Richard Perniciaro, associate dean for the Center for Regional Business Research at Atlantic Cape Community College.

"…`A healthy industry means to my membership that their jobs are secure,' said Robert McDevitt, president of Hotel Employees and Restaurant Employees International Union Local 54.

"…Profits rose mostly because of cost cutting. The eight casinos owned by three companies are increasingly sharing executives and functions, eliminating redundant jobs and achieving economies of scale.

"…Casinos are further profiting from the industrywide push to reduce the cash incentives for gamblers.

"The industry managed to cut its marketing and administrative expenses by 2.5 percent while overall costs and expenses rose only 0.4 percent, to $3 billion.

"The efficient operations enabled casinos to increase gross operating profit by $104 million on a revenue gain of $114 million.

"…The industry's net income, or bottom line, improved 38.6 percent to $146.8 million. For most of the casinos, net income means little because it includes nonoperating costs, such as management fees and debt payments, that can be imposed by their parent companies…"

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