ATLANTIC CITY, New Jersey – RESORTS Atlantic City, the first US casino outside Nevada, says it may not survive; another Atlantic City casino hasn’t made a loan payment since last summer; and three others are in bankruptcy court.

Atlantic City’s 11 casinos have been struggling for more than three years. Financial documents filed with the state this week show just how bad things have gotten.

The news was worse for the two casinos believed to be the most endangered: Resorts Atlantic City, which was taken over by its lenders in December, and the Atlantic City Hilton Casino Resort, which defaulted on its mortgage in July and could be headed for the same fate.

Resorts, formerly owned by hedge fund Colony Capital, based in Los Angeles, told New Jersey officials in a quarterly tax return that its financial challenges “raise substantial doubt about the company’s ability to continue as a going concern”. It said three major storms this winter made even its projections from November look too optimistic, and “the company will be subject to severe cash shortages”.

Even though the “going concern” language is boilerplate accounting terminology, Cory Morowitz, a casino analyst based near Atlantic City, said it shows Resorts is in serious trouble. For 2009, it posted a loss of US$18 million on US$161.2 million in revenue.

“They’re not making an operating profit,” he said. “They don’t take in enough money to pay their expenses and generate a cash flow.”

The Hilton, which is still owned by Colony Capital, posted a US$16.9-million gross operating loss for 2009 on US$165.2 million in revenue.