ATLANTIC CITY F
by Sharron Harris
or 15 years, Atlantic City “owned” gaming exclusively along the Eastern Seaboard. Millions of Americans lived within 300 miles. Within the last decade, relaxed legislation, budget problems and an eagerness to “cash in” on potential tax revenues motivated legislators in multiple states to pass laws to open dozens of new properties. Expanded gaming is now available in virtually every state within
600 miles. The recession has decreased the number of slot machines all along the East Coast in
recent years. In Atlantic City, that total has decreased by nine percent since 2009, and 30 percent since the 2005 peak year. Currently, 29,000 games operate in 11 casinos. Only three states – Florida, Maine and Pennsylvania – have increased their slots floors since 2009. However, the 21,000 new slot machines within a three-hour drive of Atlantic City have proven competitive. In addition to a slots rivalry, Atlantic City faces new increased competition from neighbouring Pennsylvania and Delaware. Both states recently added table games to their gaming mix. Atlantic City currently operates about 1,600 table games; Pennsylvania expects to have over 700 once all 10 casinos are fully operational. Atlantic City’s $1.2 billion table games franchise may be at risk. Analysts predict potential
losses of five percent to Delaware and 20 percent to Pennsylvania, totaling almost $300 million annually. Some Wall Street advisors question Atlantic City’s smaller casinos’ survival, but local government officials and casino executives vow to triumph. The solution may be to market unique non-gaming amenities. To easily transport out-of-
towners, the Atlantic City Express Services (ACES) train, an alliance between Harrah’s, Caesars Atlantic City and Borgata, will continue its multiple weekend trains between New York City and Atlantic City until at least February 2012. All 11 properties are targeting specific audiences. Numerous promotions include Harrah’s cooking programs, historic Boardwalk Hall’s expanded entertainment and sporting events, upgraded restaurants and beach bars, free concerts, beach movie nights and themed activities like Harrah’s and Trump Taj Mahal gay and lesbian-themed parties and bingo events.
The Hilton is spending $20 million on hotel renovations and new games, plus launching
a multi-session summer speaker series that begins with former President Bill Clinton. Celebrity nightclub events occur almost daily in every casino. What about the future? Governor Chris Christie’s new seven-member commission will
evaluate New Jersey’s gaming/sporting/racing industries, including whether to permit slot machines at racetracks. Other possible changes under discussion include reducing Atlantic City casino hotels’
minimum sleeping rooms from 500 to 200, limiting thoroughbred race dates while increasing prize money and exploring related online betting issues. The gaming landscape thrived from 2000 to 2008, but construction and financial
problems have since plagued casino projects like the $2.5 billion Revel once giant investor Morgan Stanley dropped out. Another controversy is potentially rebating Revel $300 million in tax exclusions, over 20 years once it opens, to be used to upgrade the neighbourhood infrastructure. Voters will decide in November. Additional real estate problems have included Pinnacle Entertainment’s aborted Atlantic
City casino project, costing the company more than $310 million in losses since 2007, plus millions in lost taxes and jobs. At the Marina district, MGM Resorts International decided to relinquish its New Jersey gaming license after the New Jersey Casino Control Commission (NJCCC) rejected the company’s business alliance with Macau casino operator Pansy Ho. MGM chose that relationship over its 50 percent stake, now up for sale, with Boyd Gaming in the Borgata in Atlantic City. Keeping the brand name, a new era begins this year for the three Trump casinos. A bankruptcy judge awarded company control to Donald Trump and his investors, but with only 10 percent ownership, “The Donald” will have no executive duties or Board seat.
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