Hurricane Irene Causes Severe Drop in Atlantic City Revenues

Hurricane Irene is being blamed for the worst revenue drop in the history of Atlantic City, as the city’s 11 casinos saw year-over-year revenues fall by nearly 20% in August. The drop, which officially measured 19.8%, broke the previous record of 19.4% from March 2009.

However, the numbers were significantly worse than they would normally have been because of the inclement weather from Irene. Because of hurricane preparations, the casinos were closed on the night of August 26 in order to give residents time to evacuate. The casinos reopened at noon on August 29, a day after Irene came through the area.

While Irene did not do significant damage to the Atlantic City area, much of New Jersey suffered extreme flooding after the storm. Similarly severe flooding was seen in parts of New York, Connecticut, Massachusetts and Vermont. This caused revenues to fall even after the casinos were reopened.

"This wasn't just a three-day event," said Tony Rodio, president of the Tropicana Casino and Resort. "We lost business for days after that."

The storm ruined what was looking to be a generally positive month for the beleaguered casino city. According to some estimates, the year-over-year loss would have been around 5% had the storm not cut deeply into casino revenues. While that may not sound impressive, it signals an improvement compared to year-over-year figures from recent months. Estimates put the losses from Irene at around $45 million.

Overall, Atlantic City gambling revenues are down about 8.7% when compared to the first eight months of 2010. The city’s gambling proceeds have been falling ever since the middle of the last decade, when the first gambling facilities were opened in Pennsylvania. In more recent years, full-service casinos have opened in Pennsylvania, and expanded gambling has come to Delaware, Maryland and New York, further cutting into Atlantic City’s market share.