Will Atlantic City Casinos Close as a Consequence of Opening of New Casinos in New York
Three new casinos in New York, which are planned to be built, could cause significant problems for Atlantic City casinos. Panelists at the casino industry conference expressed their concerns and stated that the new casinos could negatively affect the Atlantic City casinos, causing 20% to 30% lesser revenue. It can even lead to casino closures, as the panelists think.
Hard times for Atlantic City’s casinos:
Jim Allen, the chairman of the Hard Rock casino, entertainment, and hospitality company, thinks that at least one of the casinos would be closed because of the New York casinos. His company is one of the bidders for the new casino license, though.
He commented: “It could happen. Atlantic City receives 20, 30-plus percent of its revenue from upstate New Jersey and downstate New York, and there’s no doubt it is going to have an impact on this particular market.”
Among the New Jersey casinos, Hard Rock Casino, Borgata, and Ocean Casino Resort are the casinos with the highest revenue from in-person gamblers. Allen is sure that these casinos will remain open but also is concerned about others.
Wall Street analysts agree with Allen and are aware that the opening of the New York casinos will have a serious impact on Atlantic City’s gaming industry.
Wells Fargo’s managing director, Duane Bouligny, claims that the good leadership in Atlantic City’s casinos and future investments will allow the casinos to expand further. However, he is aware that some casinos won’t have that luck: some of them will have to be right-sized or closed.
A gambling historian at the University of Nevada Las Vegas, David Schwartz, said: “While it’s possible that one or more casinos could fold their tents and exit the market, there is also an opportunity for casinos to expand their offerings and give New Yorkers a reason to drive down to Atlantic City. After all, millions of people who live within a short drive of casinos fly to Las Vegas every year. Diversification of amenities and a focus on superior customer service for gamblers might offset the convenience of ‘local’ casinos in New York.”
Looking for the solution:
The revenue stated in the reports can lead to misunderstandings, as Allan claims. The main reason for that is the fact that sports betting and online gambling revenue are included in the report and that money isn’t completely owned by the casinos, but they share it with various third-party providers. Last year’s report shows a decrease in retail casinos’ revenue.
That’s why Atlantic City tries to provide its visitors with other things rather than only gambling, including hotels, restaurants, entertainment, and conference spaces, as well as various shopping malls and personal care amenities. A new water park is about to be opened soon as well.
It is still unknown who will get the licenses for New York casinos.
Allan concluded: “I can tell you this: If we lose 20 to 30% of our business, it is not going to be a great day for Atlantic City.”