Call it the Borgata effect.
The eight-month-old casino partnership between MGM Mirage (MGG) and Boyd Gaming (BYD - Get Report), has given rise to a tide of construction across the Atlantic City boardwalk that is washing away the gaming mecca's somewhat salty reputation and sparking a return to its resort-community roots.
The 200,000-square-foot hotel and casino has had a dramatic effect on Atlantic City since opening in July 2003 and is now boosting results across the boardwalk. In February, Atlantic City's dozen casinos generated $386.3 million in revenue, up 30.1% from a year earlier, according to the New Jersey Casino Control Commission. Credit the strong results to the Borgata, which wasn't around last year but which now accounts for 14.2% of the market's total revenue.
While the jump in Atlantic City revenue stemmed from easy comparisons with a February 2003 that was plagued by two blizzards, the whole market is showing signs of a comeback. Excluding the Borgata, revenue at casinos open a year ago was up 14% in February, the first same-store increase since the Borgata opened in July 2003.Even more promising: The Borgata's results stayed strong over the traditionally challenging winter, a signal that the pop in business may be sustainable. And the casino isn't just lifting the market, it's dominating it, stealing market share from rivals through aggressive promotion. To entice newcomers to check out the casino, the Borgata gives away $1,000 in slot tokens every 15 minutes from noon until midnight. "Borgata placed second among the 12 casinos in terms of absolute total gaming revenue for the sixth month in a row, trailing the much larger Bally's, third in terms of absolute slot revenue, and first in absolute table-game revenue for the seventh straight month," said Michael Reitbrock, gaming analyst for Citigroup Smith Barney, in a note.
|A Nice Place to Gamble...
Atlantic City has held its own against Las Vegas in terms of gaming revenue. Now Atlantic City is looking to boost non-gaming revenue.
|Year||Atlantic City||Las Vegas Strip|
|Total Gaming Revenue*||YOY % Change||Total Gaming Revenue*||YOY % Change|
|1997||$3.9 billion||2.4%||$3.8 billion||6.4%|
|* -- Numbers rounded. Source: Nevada Gaming Control Board, New Jersey Casino Control Commission|