Uncertainty, softness seen in AC casino market

John Curran

Friday, April 11, 2003 | 9:48 a.m.

ATLANTIC CITY -- There was a time when Rose Steeves took the bus down to Showboat Casino Hotel twice a month, to play the slot machines.

That was before Sept. 11, 2001, and before the United States went to war with Iraq. Now the 64-year-old Derby, Conn., woman worries too much about "the bridge" to come that often.

"I'm just afraid about going over the George Washington Bridge, that someone's going to try to bomb it," she said, sitting in the casino's bus depot, waiting to return home. "This is the first time I've come in a long time."

With the nation at war, the economy faltering and terrorism a lingering fear for some people, some gamblers are avoiding casinos.

Historically resilient during economic downturns, the business of slot machines, blackjack tables and roulette wheels is showing signs of softening.

"People still want to be entertained," Lawrence Klatzkin, casino analyst for Jefferies & Co., said. "But the operators we talk to say that on Saturdays they're seeing a little less people, because they're watching the TV and not traveling."

Gamblers have noticed it, too.

"You can see it on the Boardwalk, you can see it in the casinos, there's fewer people," said William McCormack, 73, of Toms River, a slot player at Trump Taj Mahal Casino Resort. "The casinos are suffering."

In the 1991 Persian Gulf War, Atlantic City casino revenues dropped 8.3 percent in the first month, but rebounded the next month, which was the only full month of the war.

This time around, the hit has been smaller -- business was off 2.1 percent in March -- but there are still worries that war will spell trouble for casinos here and elsewhere.

"It's really too early to tell," said Todd Moyer, vice president of marketing at Trump Marina Hotel Casino. "There's really three factors affecting our business: the weather, the economy and the war. We've not been able to place them in any particular order of what's affecting business the most."

Trump Marina's casino revenue fell 9.3 percent last month.

"Most of the operators we've talked to around the country said they saw an impact the first few days, but that things are hanging in there," said Eric Hausler, casino analyst for Deutsche Banc Securities.

"Business volumes appear to be good, the convention business is doing well. In 1991 the trends fell off a cliff, taking a hit hard and fast in January. We haven't seen that this time," Hausler said.

Some gamblers say they need a break from watching war coverage on television.

"I just wanted to get out and get something else on my mind," said Elizabeth Marics, 68, of South Plainfield, who was playing the slots at Trump Taj Mahal Casino Resort. "You can't sit back and worry about it. It's war. If they're going to do something, they're going to do something."

Atlantic City's casinos lost business in the weeks after Sept. 11, 2001, but regained it -- and then some -- in the ensuing months, when East Coast gamblers were leery about boarding airplanes for Las Vegas but still wanted to gamble.

"So far, it's having a lot less of an effect on gaming markets than it is on traditional destination markets like Hawaii and Orlando," said Joe Greff, casino analyst for Fulcrum Global Partners, an investment research firm in New York.

"If it's a longer-term war, it's not going to be good for a market that depends on air travel, like Las Vegas. But Atlantic City and the riverboat markets would benefit. People still want to get their fix of gambling, they just want to do it closer to home," Greff said.

Fewer customers isn't the only concern for casinos, some of which have beefed up security because it's wartime.

"We've stepped up our vigilance and added a few security posts," said Thomas Davis, president of the Sands Casino Hotel. "We're checking cars' trunks and people's IDs as they pull into valet parking and we're checking trunks when they pull into the parking garage."

William Eadington, director of the Institute for the Study of Gambling and Commercial Gaming in Nevada, compares the current lull to the weeks after Sept. 11.

The outlook for casinos could change drastically, though, and quickly, depending on what happens in Iraq.