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Brutal Winter for Atlantic City Casinos

"February snow, March war and ongoing economic weakness caused first-quarter gross operating profit at the city's 11 casinos to plunge 12 percent, to $237.6 million, according to results released Monday by the Casino Control Commission.

"The casinos' net revenue fell 4 percent, to $957.5 million.

"...Despite the poor quarter, casino executives refrained from sudden hikes in promotional spending, which could have triggered a citywide marketing war. They actually reduced promotional costs, such as cash incentives and complimentary hotel rooms, by 3 percent. Overall operating costs declined by 1 percent, to $719.9 million.

"...At the bottom line, the industry reported a $14.7 million net loss compared to a $23.7 million net profit a year earlier. 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.

"...Only two casinos reported cash-flow gains compared to the year-earlier quarter. Harrah's led the city in cash flow, up 10 percent to $41.1 million, and Hilton's cash flow was up 5 percent to $13 million.

"...Sands reported the steepest cash-flow decline, down 75 percent to $2.3 million. The casino last week blamed the results on February snow and decisions by previous management to eliminate most table games and change slot marketing..."

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