{"id":7911,"date":"2014-08-26T22:25:07","date_gmt":"2014-08-26T22:25:07","guid":{"rendered":"https:\/\/forumarchives.tmsites.net\/index.php\/2014\/08\/26\/borgata-may-gain-from-shrinking-market\/"},"modified":"2014-08-26T22:25:07","modified_gmt":"2014-08-26T22:25:07","slug":"borgata-may-gain-from-shrinking-market","status":"publish","type":"post","link":"https:\/\/forumarchives.tmsites.net\/index.php\/2014\/08\/26\/borgata-may-gain-from-shrinking-market\/","title":{"rendered":"Borgata may gain from shrinking market"},"content":{"rendered":"<p><!-- Original Post Content --><br \/>\n<img decoding=\"async\" src=\"http:\/\/i58.tinypic.com\/140fekk.jpg\" alt=\"\" \/><br \/>\n\t<span style=\"font-size: 185px\">In this June 26, 2013 photo, the Borgata Hotel Casino &amp; Spa is seen in Atlantic City, N.J., with the nearby Water Club reflected in its gold glass facade. The casino&#8217;s third quarter revenue rose by nearly 7 percent to just more than $200 million. <\/span><\/p>\n<p>\tBy HOWARD STUTZ<br \/>\n\tLAS VEGAS BUSINESS PRESS<br \/>\n\tBoyd Gaming Corp. told investors last month it planned to change out a few of the restaurants, nightlife spots and other nongaming attractions inside several of the company\u2019s area casinos to boost overall revenue.<\/p>\n<p>\tThis particular plan has been met with success along the Strip, but has been slow to be embraced by regional markets. Gaming revenue can\u2019t always be counted on to boost a company\u2019s bottom line.<\/p>\n<p>\tJ.P. Morgan gaming analyst Joe Greff told investors the idea will help Boyd\u2019s Coast Casino properties and Sam\u2019s Town to better prepare for demographic shifts in the locals market.<\/p>\n<p>\t\u201cWhile the persistent weakness in gaming spend is clearly an ongoing issue, Boyd believes that growing consumer interest in nongaming attractions is an opportunity for the company to take advantage going forward,\u201d Greff said after an investment meeting with Boyd executives.<\/p>\n<p>\tGreff said the company hasn\u2019t targeted which properties will be in line for the renovations. The process will be a multiyear reinvestment.<\/p>\n<p>\tBorgata, the company\u2019s flagship resort in Atlantic City, may see a revenue boost from a far different means.<\/p>\n<p>\tThat\u2019s because Atlantic City is shrinking.<\/p>\n<p>\tThe Atlantic Club closed earlier this year. The aging Showboat is scheduled to close Sunday while the 2-year-old Revel will shut down after Labor Day Weekend. Trump Plaza is closing Sept. 16.<\/p>\n<p>\tIn a city that has seen gaming revenue decline more than 60 percent in the past seven years, the Borgata remains the class of the market.<\/p>\n<p>\tBoyd Gaming owns the Borgata in a 50-50 joint venture with MGM Resorts International. The company also operates the hotel-casino and its adjoining nongaming Water Club hotel.<\/p>\n<p>\tIn the second quarter that ended June 30, Borgata reported net revenue of $181.9 million, which included $6.7 million from online gaming.<\/p>\n<p>\tBorgata alone produced almost as much quarterly revenue as Boyd\u2019s Las Vegas locals and downtown casinos combined.<\/p>\n<p>\tAnalysts asked company leadership about any effect the casino closures will have on the Borgata.<\/p>\n<p>\t\u201cThis is obviously not welcome news for anyone,\u201d Boyd Gaming CEO Keith Smith said in prepared remarks. \u201cWhile all these closures are painful for the local economy, they should help create a more rational environment in this market.\u201d<\/p>\n<p>\tWhich means Atlantic City casino patrons will look for other options.<\/p>\n<p>\tSmith said Borgata picked up a few customers when the Atlantic Club closed. But the lower-end-of-the-market Atlantic Club had a different customer base from Borgata, which crosses many markets.<\/p>\n<p>\t\u201cThere are more customers and just less places for them to go, so that will work to our advantage,\u201d Smith said in response to an analyst\u2019s question. \u201cSome of those customers will find their way to the Borgata. Clearly, it always has been the premier facility in the area, so I think we will see some pickup from there.\u201d<\/p>\n<p>\tAtlantic City has suffered as neighboring eastern states \u2014 Pennsylvania, New York, Maryland, and Delaware \u2014 added forms of gaming. Borgata, however, increased its market in face of the competition.<\/p>\n<p>\tAs for New Jersey\u2019s online gaming activities, which launched in November, Borgata is a partner with European giant Bwin.party. The casino\u2019s online presence controls a market-leading 28.8 percent of the activity, currently run by six Atlantic City casinos.<\/p>\n<p>\tThe next largest competitor, Caesars Entertainment Corp. and its WSOP.com brand, is 10 percentage points behind Boyd.<\/p>\n<p>\tSmith told analysts online gaming has grown Borgata\u2019s business. Seventy-five percent of the accounts were created by gamblers who were not previously Borgata customers.<\/p>\n<p>\tMany of those online players are now live-casino Borgata players as well.<\/p>\n<p>\tWith the company\u2019s Midwest and Southern casinos challenged by reduced customer spending habits, Borgata is key to Boyd Gaming\u2019s continued growth.<\/p>\n<p>\tNew Jersey, however, is debating the future of Atlantic City and is considering allowing gaming to expand to other parts of the state.<\/p>\n<p>\t\u201cThere\u2019s a lot of conversations by the politicians about it, and it\u2019s something we\u2019re clearly paying attention to because it could have an impact on Atlantic City,\u201d Smith said.<\/p>\n<p>\tBorgata has survived competition from neighboring markets since its 2003 opening. Smith said the resort will be a strong brand in the region.<\/p>\n<p>\tIf something were to happen in northern Jersey I think Borgata will have a very good chance of being able to participate,\u201d Smith said.<\/p>\n<p>\t\u201cI don\u2019t think there\u2019s anything imminent. I don\u2019t think we\u2019re overly concerned that something\u2019s going to happen in the next year or two.\u201d<\/p>\n<hr>\n<h3>Replies:<\/h3>\n<p>No replies were posted for this topic.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this June 26, 2013 photo, the Borgata Hotel Casino &amp; Spa is seen in Atlantic City, N.J., with the nearby Water Club reflected in its gold glass facade. The casino&#8217;s third quarter revenue rose by nearly 7 percent to&#8230;<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[],"class_list":["post-7911","post","type-post","status-publish","format-standard","hentry","category-latest-casino-news"],"_links":{"self":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7911","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/comments?post=7911"}],"version-history":[{"count":0,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/posts\/7911\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/media?parent=7911"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/categories?post=7911"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumarchives.tmsites.net\/index.php\/wp-json\/wp\/v2\/tags?post=7911"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}