Turns out, the house doesn’t always win.
Hedge-fund high rollers who bet big on a comeback for Atlantic City’s casinos are watching their gambling profits dwindle.
The city’s casino industry suffered its sixth straight decline last year, with winnings down 8 percent to $3.05 billion, the New Jersey Division of Gaming Enforcement said in its latest annual report, released yesterday.
Even before Sandy laid waste to the city’s famed boardwalk and emptied its casinos, the gaming industry was down 4.8 percent through September, the regulator said.
The numbers suggest the odds are increasingly stacked against deep-pocketed backers who play a key role in reviving the city’s fortunes.
Lasry led a group of investors who brought Trump Entertainment out of bankruptcy in 2010.
Billionaire investor Carl Icahn owns Tropicana Casino and Resorts, which he bought out of bankruptcy in 2010.
Lasry’s Trump Taj Mahal saw casino winnings fall 15 percent last year, while Trump Plaza was down 25 percent, according to yesterday’s report.
Icahn’s Tropicana fell 9.8 percent.
Lasry and Icahn didn’t respond to requests for comment.
Meanwhile, a handful of hedge funds, including Canyon Capital, have plowed money into Revel – the first new Atlantic City casino in 10 years – only to be disappointed since the $2.4 billion resort opened its doors in April. The report didn’t include an annual figure for Revel.
Late last month, investors coughed up another $150 million to keep Revel open through summer.
The beachfront property lost $37 million in the quarter ended in September, on top of a $35 million loss in the previous quarter.
Revel’s woes are a major blow to New Jersey Gov. Chris Christie, who granted $261 million in tax rebates to get the stalled casino project going again after Morgan Stanley abandoned it.
“At some point it looks like a car going in slow motion and heading into a brick wall,” said Richard Bronson, a gaming expert and founder of US Digital Gaming.
“They’re trying, but its very difficult when you’ve been a monopoly and suddenly everyone around you is in the business,” he said.
Indeed, competition is rising. Neighboring Pennsylvania legalized gambling, starting with slot machines, in 2004. New York’s Aqueduct casino in Queens opened in late 2011.
Yesterday’s report shows declines for every casino, except for the Golden Nugget, which opened in March 2011. The Las Vegas-based chain saw an increase of 67 percent in 2012.
The last time New Jersey’s gaming division reported a gain for AC was 2006, when revenues rose 4 percent to a record $5.2 billion. Slot machine revenues alone were $3.8 billion – more than last year’s total casino winnings.