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Atlantic City casinos posted the second-highest monthly win tally ever in August, but Harrah's (HET - commentary - Cramer's Take) properties missed the party as they faced intense competition from the recent expansion at the hip Borgata Casino.
Casinos in the New Jersey boardwalk city rebounded from a three-day government shutdown in July to post a $494.4 million win tally in August, up 4.5% from the year earlier, according to the state's Casino Control Commission.
For the first eight months of the year, casinos won $3.5 billion, up 4.1% from the same period in 2005.
The Borgata casino, which is jointly owned by MGM Mirage (MGM - commentary - Cramer's Take) and Boyd Gaming (BYD - commentary - Cramer's Take), led the market's growth and grabbed more gambling dollars than any other casino in the city.
The property saw its win tally rise 14% to $72.9M from $64 million a year earlier. The trendy casino opened its $200 million expansion in July and now boasts the largest poker room in the city, taking the crown from Trump's (TRMP - commentary - Cramer's Take) Taj Mahal property.
Harrah's properties posted a combined 1.4% growth in August, below the 5% to 6% forecast by Calyon Securities analyst Smedes Rose. Borgata's expansion is forcing Harrah's to step up its promotional activity, which hurts margins, Rose said in a research report Tuesday.
Rose cut Harrah's to "add" from "buy" and dropped his third-quarter EPS estimate for the company to 96 cents from $1.05 because of the Atlantic City competition.
Gaming wins rose 7% at Harrah's Caesar's property and 2% at Bally's, but results were flat at Harrah's Marina. |
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