After Atlantic City opened its first legal casino in 1978 it started attracting gamblers from all our surrounding states which brought an infusion of out-of-state revenue. These were monies we would not otherwise have received and which strengthened our economy. Now these gamblers have their own local casinos and racinos, so there is less incentive for them to bring their money to NJ. Also some New Jerseyans are spending their gaming dollars outside NJ at nearby facilities further lowering our revenue – a lose-lose situation.
In the midst of this crisis (long in the making) Governor Christie yesterday convened a summit which he will lead “of state and local leaders to address the future of Atlantic City” to take place on September 8. There is no mention in his announcement that the summit will also address possible gambling in northern New Jersey. A one-day summit seldom solves much, but it is a beginning and may galvanize attention.
The regional market is saturated. The NY Times reports, “More than half the population in the Northeast now lives within 25 miles of a casino up from about 10 percent a decade ago. As the market grows crowded, many older casinos are declining or going bankrupt.” The NY Times data for revenue through 2013 indicates: NJ reached its peak of over $5 billion in 2006 and has declined to under $3 billion. Pennsylvania started declining in 2011 to under $3 billion. Connecticut saw its decline start in 2006 to slightly over $2 billion. Delaware began its decline 2010 to less than $1 billion. New York is showing an increase to $2 billion, but more recently questions have been raised regarding its sustainability.
More specifically about AC below the fold.
Atlantic City once the doyen of the east coast casino business is aging not so gracefully. It is on track for four facility closings this year (including Revel) with a potential calamitous loss of some 8,000 jobs or more plus a significant reduction in state and city tax revenue.
Senate President Steve Sweeney earlier this week said, “We’ve hit bottom.” Even his prediction may be too rosy as a few more casinos may fall before the situation stabilizes. Sweeney went on to say, “We really want Atlantic city to be a resort with casinos, not a casino town that has a beach.” That is the difficult but necessary goal. Gov. Christie so far has failed. He has wasted time, hope and money on a too expensive building (Revel) in an already overbuilt casino town. Sweeney is also planning to introduce legislation to bring the business to northern New Jersey. Not so fast, Sir.
With Atlantic City casinos receiving underwhelming revenue from on-line gaming and with the U.S. Supreme Court shooting down New Jersey’s effort to get sports betting, AC has to redouble its efforts to become a resort destination city. Las Vegas, which remains the nation’s largest casino revenue producer ($6.5 billion in 2013), has seen its gambling income decline, but “The Strip has done a good job of building up its non-gambling appeal by offering nightlife, shows and high-grade hotel and dining experiences.” With its large airport, tourists and conventioneers flock to Las Vegas and participate in the buzz which is part of its attraction.
More on Atlantic City, the possibility of northern New Jersey gaming, and the summit in the next installment.