Facebook
Fark
Digg
Reddit
Stumble
Published Monday, July 26, 2010 | 8:46 a.m.
Updated Monday, July 26, 2010 | 12:23 p.m.
Sun Coverage
Boyd Gaming Corp. of Las Vegas today said revenue and net income fell during the second quarter for its half-owned Borgata casino resort in Atlantic City.
The property generated a profit of $17.3 million, down from $18.3 million in the year-ago quarter, as net revenue fell 2.4 percent to $186.9 million.
Boyd cited a reduction in day trip visits to Atlantic City as regional school calendars were extended to make up for school closures during severe winter storms in the first quarter.
Borgata was also hurt by regional competitors in Pennsylvania that stepped up slot machine promotions in the quarter, higher energy costs and unlucky play by the casino.
Boyd said Borgata's table game hold, or win, was 11.8 percent in the second quarter, down from 14.2 percent in the year-ago quarter.
Today's numbers were disclosed to investors as Boyd seeks financing for a Borgata subsidiary that would result in Boyd receiving a payment of about $100 million. Boyd Gaming is seeking approval from the New Jersey Casino Control Commission for the financing deal.
Bloomberg Finance reported that in the financing deal, the Borgata plans to raise $800 million through a secured note and revolving loan transaction. The $800 million would be used to repay $626.8 million outstanding under the resort’s existing credit facility, with about $149 million funding a dividend payment to the resort’s owners.
Deutsche Bank securities analyst Andrew Zarnett estimated another $25 million would cover fees and expenses for the financing transaction.
"We believe that a successful refinancing of the credit facility will allow the Borgata to extend its debt maturities beyond 2014, as well as may help extinguish its restrictive covenants to endure reduced business volumes in Atlantic City," Zarnett wrote in a research note.
Boyd didn't immediately say what it would use the $100 million for. The company hasn't said if it plans to buy out the 50 percent interest in Borgata held by longtime partner MGM Resorts International.
Boyd has the right of first refusal to buy MGM's share in the 2,000-room Borgata.
Fitch Ratings has estimated that MGM could receive $225 million to $450 million for its share of Borgata.
MGM Resorts agreed to exit the New Jersey gaming market this year to close an investigation into its ties in Macau with its partner there, Pansy Ho. New Jersey regulators assert Pansy Ho's father, Chinese gambling boss Stanley Ho, has ties to organized crime, but MGM Resorts has insisted Pansy Ho is a suitable partner.
Unlucky play by the casino? Every time I go there I lose,but I will say the clientele is generally a notch above some other places.Sorry to hear their revenue is down,guess what,so's mine.
Just loosen up the slots a little,give people a chance to win something.The slos arond here are tighter than a crabs arse.
With MGM gone, we can say "Welcome to Las Vegas, the New Atlantic city."
Tom Shermspun
A plague to Boyds! They don't give u a break. I wouldn't gamble at a boyd's establishment even if it was the ONLY one!
The funny thing is that The Borgata has the loosest slots in Atlantic City. The Pennsylvania market is killing AC and their casino industry. Pa added table games earlier in the month and visit any of the establishments any evening during the week and you are hard pressed to find a seat at a blackjack table, let alone a poker game, forget the weekend crowds. Pennsylvania casinos just reported the highest casino income of any state in the US. Yes their state take is 55% but their sot machines pay extremely well and you have choices such as horse racing, table games and pretty loose slots.
AC is done and there is nothing anyone can do to bring it back, The Hilton, Resorts, Trump Marina and Plaza are all hanging on by a thread that is really close to breaking.
p
The hold on the Suncoast machines these days are outrageous. No one wins anymore, no one.
Perhaps they could increase revenue by creating a LV "ruins" tour.
$20 pp + Korbel champaign, stopping at FountainBlue.
All "them" midwestern tourist who go and see the LIberace tour would love it
Boris from Transilvania
AC's a dump. NJ was lucky they had a virtual gambling monopoly there for many years after 1978. Were they able to elevate AC out of the muck? No! Still the same dump it was in the 60's and 70's.
Boyd cited a reduction in day trip visits to Atlantic City as regional school calendars were extended to make up for school closures during severe winter storms in the first quarter.
I would imagine school calenders were extended in PA too. Doesn't look like it hurt casino revenues there. I don't understand the logic anyway. School's out, so you leave your kids to go gambling? Just what "target market" is that?
It's all about economy and competition -bottom line!
Was at the Borgata this past weekend and seen nobody winning on the slots. If they want there business back they are going to have to change the chips in the slot machines. Nobody was winning. You seen more people just walking around talking about how tight the slots were. Get with it Borgata change the chips in your slots