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New York casinos could hurt Atlantic City casinos
On Wednesday, April 19 and Thursday, April 20, the East Coast Gaming Congress was held in Atlantic City.
This was an opportunity to discuss the potential impact of the 3 future New York casinos on the revenues of the casinos in the famous New Jersey resort.
Some of the speakers at the event spoke of a possible 20% to 30% decrease in revenue.
The proposed closure of a casino in Atlantic City
The Hard Rock International group owns a hotel-casino in Atlantic City and is one of the candidates in southern New York State. It is therefore totally concerned by the question. Its president (Jim Allen) was one of those who spoke about this disturbing subject. He pointed out that Atlantic City casinos were getting about 20% to 30% of their revenue from players from upstate New Jersey and downstate New York.
As a result, future gaming facilities in the megalopolis area of the same name may have a negative impact on Atlantic City. Ultimately, it could even result in the closure of at least one of the resort’s resorts.
Currently, there are 3 or 4 casinos doing very well in Atlantic City, namely: the Borgata (with $140.2 million in gross operating profits in 2022), the Hard Rock ($128 million), the Tropicana ($109.7 million) and the Ocean ($96.2 million). The results of the others are much more mixed.
One wonders what will happen to them when the future casinos in downstate New York are finally operational.
Investments and diversification of activities needed
These concerns are also shared by several Wall Street analysts. Nevertheless, the managing director of Wells Fargo (Duane Bouligny) believes that the Atlantic City casinos that continue to invest and have good management should still be able to grow.
This is the general view of David Schwartz (a gaming historian at the University of Nevada, Las Vegas). In his opinion, it is possible that one or even more Atlantic City casinos will be forced to close.
However, others may succeed in expanding their offerings if they can give New Yorkers a reason to come to them.
He pointed out that every year millions of people living near land-based casinos still go to Las Vegas. This must include diversification of the activities offered.
An evolution of the economic model underway in Atlantic City
It should be noted that Atlantic City has been trying to diversify its business model for years. Thus, many new hotel rooms, restaurants, entertainment and conference venues for example have been created. In 2023, a $100 million year-round water park is scheduled to open.
The Caesars Entertainment Group will also soon open a theater to host a resident show, as is common in Las Vegas.
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