Atlantic City – Blaming the weak economy and competition from casinos in surrounding states, Atlantic City’s biggest gaming operator says it has begun cutting the work force at its four properties.

Harrah’s Entertainment Inc. declined to disclose how many layoffs it has made at Harrah’s Resort, Bally’s Atlantic City, Caesars Atlantic City and Showboat Casino Hotel. Employment figures compiled by the New Jersey Casino Control Commission indicate hundreds of job cuts at Bally’s and Caesars.

The company issued a statement Thursday that said Atlantic City’s gaming market is being squeezed by the sagging economy, competition from slot parlors in Pennsylvania and New York, and the casino smoking ban.

„The country is experiencing a historically difficult economic period. The gaming industry, as with nearly all consumer business in the country, has been negatively impacted by the difficult circumstances of the economy,“ the statement said. „Business levels for the Atlantic City gaming market are down nearly 10 percent year over year.

Adding to the current challenging economic environment is the increased competition in Pennsylvania and New York and the effects caused by the smoking ban.“

In response to lobbying from the gaming industry, City Council voted Monday to lift the smoking ban, starting Nov. 16, for at least a year to give the casinos more time to recover from the economic crisis. Casinos had feared a mass exodus of smokers to Pennsylvania, Connecticut and other casino markets that have less stringent smoking restrictions or none at all.

Casinos warned that major job cuts were likely if the smoking ban wasn’t lifted. But even though smoking is about to return, Harrah’s said business has dropped to the point where it has been forced to cut jobs.

„Circumstances have forced us to eliminate positions to ensure that we are operating within current business volumes,“ the company said. „As positions are eliminated, we are working closely with employees who are impacted to assist them in their transition.“

The most recent employment figures compiled by the Casino Control Commission show that the four Harrah’s properties had a total of 16,034 workers this September, essentially the same number as in September 2007.

However, there have been significant swings at the individual casinos. In September, Bally’s was down 502 workers and Caesars had 270 fewer employees compared to the same month last year. Showboat has had a slight drop in the number of jobs. But Harrah’s Resort has added 656 workers, primarily because of a USD 550 million expansion project this year that included a new hotel tower and a large pool complex.

October’s employment figures, which will be reported in the first week of November, are expected to show more cuts. Harrah’s spokeswoman Alyce Parker said layoffs have begun at all four of the company’s casinos, but she would not divulge how many.

Atlantic City is hardly alone in making layoffs in the slumping casino industry. Gaming companies in Las Vegas, Mississippi, Detroit and Connecticut have announced job cuts in recent weeks. Perhaps most shocking was the loss of 700 jobs this month at the Indian-owned Foxwoods Resort Casino in Connecticut.

Fall is a time when casinos traditionally make seasonal layoffs following the post-Labor Day slowdown in Atlantic City tourism. But analysts have been warning of deeper job cuts caused by a sharp decline in casino business.

Joel H. Simkins, senior vice president of gaming and leisure at Macquarie Capital Inc., said casino operators nationwide have begun „circling the wagons“ while searching for ways to offset lower revenue.

„Going forward, we expect operators to focus on several areas to reduce expenses, including involuntary workforce reductions, shorter casino operating hours, outsourcing of food and beverage venues, introduction of electronic table games, reduced marketing and promotions … (and) a greater focus on cash hotel room sales,“ Simkins wrote in a note to investors.