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Atlantic City Round-up

10 June 2002

by Joe Weinert

ATLANTIC CITY -- Atlantic City casinos chalked up their seventh straight month of revenue increases in May, when they won $378.7 million from gamblers. That was 3.2 percent better than the year-earlier month, according to preliminary results. More importantly to casino executives, the cityís slot- machine revenue increased 6 percent for the month. Table- games revenue declined 4.4 percent due to sharply lower volumes.

"This trend bodes well for operators, as slot machine revenue is higher margin and more stable," CIBC World Markets analyst William Schmitt said. "The other important catalysts for growth in Atlantic City are property development and capital improvements. ìThe six projects presently planned for completion over the next three years are intended to broaden the marketís reach by offering destination facilities, decreasing Atlantic Cityís reliance on drive-in customers," he said.

Schmitt was referring to $1.8 billion in casino-related projects either under way or scheduled to begin within seven months.

Bally's supplanted Trump Taj Mahal atop the monthly revenue list, winning $46.5 million from gamblers, up 7.5 percent. Revenue at the Taj declined 2.1 percent, to $46 million, on lower table volumes. Caesars was third on the list at $44.3 million, up 14.9 percent, the best improvement in the city.

On the other hand, Sands began paying the price for scrapping more than half of it stable games. The struggling Carl Icahn-owned casino reported an 11 percent revenue decline, to $17.8 million. Table-games revenue plummeted 43.6 percent while slot revenue grew 1.5 percent.

"We knew weíd be falling," said Herbert Wolfe, Sands' new president.

Wolfe chose to eliminate 43 of Sands' 71 gaming tables and replace them with 400 slot machines. He said the move was necessary to stop a decade-long slide in profitability.


Responding to efforts by New Jersey politicians to delay the spread of Indian casinos, members of a New York tribe asked gaming regulators in New Jersey and Nevada to investigate Park Place Entertainment for allegedly meddling in tribal affairs two years ago.

Philip Tarbell and Barbara Lazore, officials in a dissident group of St. Regis Mohawks, claim Park Place "interfered in our internal tribal governmental affairs, presumably in the interests of either delaying the efforts of the St. Regis Mohawks to develop a casino in the Catskill Mountains or gaining a casino for themselves."

They formally asked James Hurley, chairman of the New Jersey Casino Control Commission, and Peter Bernhard, chairman of the Nevada Gaming Commission, to investigate the matter.

A Park Place spokesman declined comment.

Tarbell and Lazore, referring to a Boston Globe last fall, claim Park Place officials used federal political donations to sway U.S. Bureau of Indian Affairs decisions that led the Mohawks dumping their longstanding casino partner and hooking up with Park Place.

A tribal court affiliated with the dissidents issued a $1.8 billion judgment against Park Place for causing the original casino breakup. Park Place claims the court is illegitimate and the judgment is meaningless. Park Place and the Mohawks plan to build a large casino resort in the Catskills.


Three low-level Atlantic City casino employees agreed to 20-day license suspensions and $250 fines to settle charges that they violated the state law against casino gambling under age 21.

Although Atlantic City casino employees who hold a key license are forbidden from gambling anywhere in the city, lower-level employees can gamble at casinos unaffiliated with their own ó provided theyíre of legal age.


Atlantic City casinos can now offer progressive-jackpot systems in which different slot machines in the link carry different denominations. Beforehand, every machine on the system had to have the same denomination and the same odds of hitting the jackpot.

Under a new Casino Control Commission rule, a dollar machine and a nickel machine could now be linked to the same jackpot. However, the probability of hitting that jackpot would vary in proportion to the denomination or the maximum wager, or both.


Donald Trump and the directors and officers of the publicly held casino company he controls will face off against shareholders Wednesday at Trump Taj Mahal. The annual meeting comes after a wild year, in which the company delayed interest payments to bondholders, failed to sell a $450 million junk-bond deal at favorable terms, saw big swings in its stock price and reported blockbusters first-quarter earnings.

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