Inside Gaming: Atlantic City Casinos Enjoy Revenue Gain to Start Year
This week’s installment of Inside Gaming shares the news that Atlantic City casinos collectively enjoyed a revenue gain during the first part of 2016, reports on an IRS charge that an Iowa casino should lose its nonprofit status, and tells of the Las Vegas Sands agreeing to pay another fine resulting from allegations of violating gaming laws.
Atlantic City Casinos See Revenue Increase To Start the Year
While much of the financial news regarding the eight remaining casinos on Atlantic City’s famed boardwalk has been negative over the last couple of years, the latest revenue reports show 2016 has started off on a better foot with a 4.4% increase in gambling revenue over the first four months of the year.
As shared by the Press of Atlantic City, regulators reported the news yesterday that the city’s eight casinos produced $812.8 million in gambling revenue from Jan.-Apr. 2016. That total includes online gambling revenue earned by the casinos, constituting $61.8 million of the total (up a significant 29.3% year-over-year), while brick-and-mortar revenue added up to $750.9 million (for a 2.7% yearly increase).
While bettering the start of 2015, that $812.8 million total is 7% less than what Atlantic City casinos earned during the same period in 2014, and 35.6% less than what they earned in 2009. Following the closure of four Atlantic City casinos in 2014, the remaining eight all enjoyed an increase in profit during 2015.
The Borgata Hotel Casino & Spa led as usual in total gaming revenue with $237.4 million for the first four months of the year, up 4.5% over 2015. That’s about twice the revenue of the next-closest Harrah’s Resort which earned $114.7 million over that period, a decrease of 4.3% from a year ago.
Other casinos enjoying increases from Jan.-Apr. included the Resorts Hotel Casino (up 12.7%), the Golden Nugget Atlantic City (up 9.3%), the Tropicana Atlantic City (up 9%), and Bally’s (up 6.9%),
Meanwhile joining Harrah’s in seeing declines were Caesars Atlantic City (down 4.3%) and the Trump Taj Mahal Casino Resort (down 3.4%).
For more on the overall gain by Atlantic City casinos so far this year, check out the Press of Atlantic City.
Iowa Casino Should Lose Nonprofit Status, Says IRS
Following a year-and-a-half long investigation by the Internal Revenue Service, the Prairie Meadows Racetrack and Casino in Altoona, Iowa may no longer be allowed to consider itself a nonprofit. Yesterday the Des Moines Business Record reported that a letter from the IRS has been sent to the casino, giving Prairie Meadows “30 days to respond and make a case for why it should retain its [nonprofit] status.”
The IRS’s investigation concluded Prairie Meadows to be “one of the top 10 revenue-generating organizations operating as nonprofit social welfare agencies in the country, taking in $2 billion a year in bets or gross receipts.” Responding to the charge, an attorney representing Prairie Meadows noted how 92% of that amount goes back to the gamblers.
First opened in 1989, Prairie Meadows uses revenues to help support numerous community projects in and around Altoona and nearby Des Moines. Over the years the casino has ranked just behind Horseshoe Casino Council Bluffs in terms of gross gaming revenue in the state. E.g., for 2014, the Iowa Racing and Gaming Commission reported the Horseshoe earned just over $189 million to top the state’s nearly 20 casinos, with Prarie Meadows next on the list with $185.7 million.
If Prairie Meadows does lose its tax-exempt status as a nonprofit, “central Iowa stands to lose about $30 million a year that has been returned to a variety of charitable organizations and governmental bodies,” according to Prairie Meadows President and CEO Gary Palmer.
Palmer noted that the casino has hired a tax attorney from Washington, DC to help them prepare their response to the IRS.
For more on the not-so-tranquil scene at Prairie Meadows, visit the Des Moines Business Record.
Las Vegas Sands Agrees to Pay $2M Fine from NGCB
This week the Las Vegas Sands Corporation agreed to pay a $2 million fine levied by the Nevada Gaming Control Board following allegations that the company violated state gaming law.
VEGASINC reports the fine resulted from earlier federal-level allegations concerning accounting violations in China as well as failures to follow mandated anti-money-laundering practices in Las Vegas.
As we reported here last month, in April Las Vegas Sands reached a civil settlement with the U.S. Securities and Exchange Commission in order to end the SEC’s probe into whether or not the company had broken a federal anti-bribery law after paying a consultant to help them in China and Macau.
The SEC had charged the Sands had created a deceptive “middle man” whose purpose was to conceal the company’s effort to buy a Chinese Basketball Association team (which gaming companies cannot do), one of a couple of forbidden deals with which the representative was said to be involved for the Sands.
Over the course of the SEC’s five-year probe, it was the Commission's revelation that the Sands had kept inaccurate records and lacked other needed documentation regarding its dealings that in part prompted the NGCB’s decision to institute the fine.
Also prompting the measure was another agreement reached by the Sands with the U.S. Attorney’s Office in 2013 which involved the Sands returning $47.4 million to the U.S. Treasury to end another probe involving suspicious activity by a high roller, a suspected drug trafficker who’d wired conspicuously large transfers and cashier’s checks to the Venetian-Palazzo during 2005-2007. (See the Reuters story for more on that investigation and agreement.)
The Nevada Gaming Commission must now approve the settlement, and will meet next week to decide the matter.
Read more about the Sands’ latest settlement at VEGASINC.
Photo: “Boardwalk Atlantic City NJ 6037,” bobistraveling. Creative Commons Attributions Share-Alike 3.0 Unported.