Lucky Gamblers Reason Borgata Profits Fall
Borgata Hotel Casino and Spa’s has seen a couple of gamblers win big and smiled upon by “Lady Luck” at some of the tables at the casino, however this is great for the gamblers but unfortunately not for the Borgata.
Borgata’s has had more ups than downs recently and has cost Atlantic City’s top-grossing casino millions of dollars in revenue and has raised several eyebrows as a result of this. Some gaming analysts have even speculated that there might be a “syndicate” that is defrauding the casino.
”Adam Steinberg of Merriman Capital asked outright if there have been some discrepancies involved because of the recent winnings at the Borgata on the third-quarter earnings report.”
This question has been asked by Steinberg to the executives of Borgata’s parent company, Boyd Gaming Corp., he voiced his concerns that the casino lost $9 million in revenue during the quarter because as a result of its abnormally low table games hold percentage.
Keith Smith, Boyd’s president and chief executive officer, replied that Borgata officials have investigated the matter and “made sure that there are no discrepancies involved.”
“Rest assured we have not found any problems so far,” Smith said. “All possible procedures have been followed and met. Some players have been exceptionally lucky of late and we need to realise in this game it will happen, the sooner we accept it the better.”
Borgata’s net profits have dropped in the third-quarter to $207.7 million, nearly a 7 percent drop from $222.6 million in 2009. To add fuel to the fire, gross operating profits took a nose dive to 19.7 percent to $54.3 million for the quarter, the company stressed.
“Lower table profits could has impacted greatly on our initial revenue stream to date and the reason for this is the unusual amount of lucky players at the casinos tables the last couple of months,” Boyd’s chief operating officer Paul Chakmak said. “If only we had practised historical table games hold, our profits approximation would have been $9 million higher during the quarter.”
The “hold percentage” is the phrase for the proportion of gaming chips the casino holds in comparison with the quantity it sells to players. For example, assuming a player who plays blackjack buys $200 in chips and forfeits $30 in bets, therefore the casino’s hold percentage would be 15%.
The hold percentage at Borgata’s table games for the third quarter this year has been 12.09 percent; this is 2 percent lower than its normal 14.34 percent from 2005 to 2009, based on statistics that have been issued by the casino. In the second quarter of this year the hold percentage was 13.77 percent and 13.62 percent in the first, way below historic levels.
“It’s our responsibility as a gaming company to examine and explore all avenues available to us concerning transparency in any phase of our operation,” Coskey mentioned. It’s not unusual to have this kind of inquest — it constitutes a part of our business and just one of the ways that we authenticate the truthfulness of our operation.”
Ultimately Borgata’s top brass had to admit that some of their players experienced a fantastic winning run. “Borgata is the place to be and here players win big, our players have just proved it so far this month,” Coskey said.
Random security checks conducted so far indicated no foul play; however the Borgata has had its fair share of illegal gambling in the past. In 2007, the powers that be broke up an illegal sports-betting business that was run and operated out of Borgata’s high-stakes poker room. The casino has been lauded by authorities for their continued support and assistance in the apprehension of the illegal betting syndicate.