ATLANTIC CITY — A decade ago, the city’s casino industry changed forever as four venues closed over a nine-month period.
Showboat Casino Hotel closed Aug. 31. Revel Casino Hotel shut down Sept. 2. Trump Plaza Hotel and Casino went out of business Sept. 16.
The Atlantic Club Casino Hotel closed in January 2014, which meant that by the fall of 2014, the city’s gaming market had shrunk from 12 to eight casinos, thousands had lost their jobs and the city was sent reeling. Atlantic City currently has nine brick-and-mortar casinos that have generated more than $1.63 billion in revenue so far this year.
“When five casinos closed between 2014 and late 2016, it was a warning that casino gaming revenues may impress, but it’s profits that keep the lights on,” said Tony Marino, a former Atlantic City Expressway executive who now writes a newsletter discussing the city’s tourism and casino trends. “After 2006, as numerous casinos opened in Pennsylvania, New York, Maryland and other nearby states that were once the monopoly territory of Atlantic City’s casinos, gaming revenues plummeted, and profits were squeezed to the bone.”
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The question that always lingers around the city’s gaming industry is: Could it happen again?
The continued development of internet gaming, sports betting and the potential for casinos in New York City could impact brick-and-mortar properties in much the same way that the expansion of gaming along the East Coast did a decade ago.
“Many of the market conditions that preceded the closures persist to this day — loss of an East Coast casino monopoly and intensifying regional competition especially for in-person ‘convenience’ gamblers,” said Jane Bokunewicz, director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University, which studies the Atlantic City gambling industry. “The looming promise of downstate New York casinos and the existential threat of North Jersey casinos are an echo of this.”
During the 2023 East Coast Gaming Congress in the resort, panelists said the construction of three new casinos in New York could cost Atlantic City 20% to 30% of its casino revenue, a development that could possibly return the resort to the days of casino closures. During the conference, Jim Allen, chairman of the global Hard Rock casino, entertainment and hospitality company, said such a revenue drop could lead at least one Atlantic City casino to close.
During the same event, Mayor Marty Small Sr. called the idea of downstate New York casinos a “threat” to the health of the resort.
Casino officials say they could have a year before the impact of New York City casinos will be felt in the resort.
New York has yet to award licenses for the casinos.
“The opening of casinos in downstate New York will likely be disruptive to the New Jersey market. The magnitude and nature of this disruption will be dependent on a variety of factors and circumstances most closely tied to product differentiation, customer loyalty and value added experiences,” Bokunewicz said. “It is possible that one or more of Atlantic City’s casinos will struggle to remain financially viable in the face of the disruption, and it is also likely that the slow rollout of New York casinos has given properties the opportunity to plan for this eventuality and strategically position resources in order to ably respond to the threat.”
One of the plans, a joint venture between Mets owner Steve Cohen and Hard Rock International, which has a property in Atlantic City, would develop Metropolitan Park near Citi Field. The project would include 20 acres of public parks, a food hall hosting restaurants from Queens, a Hard Rock hotel and a gaming and entertainment complex.
Allen said the $8 billion project is set to be an “international integrated gateway city resort.”
“If it’s selected,” Allen said of the proposal in July, “it’s good news for Hard Rock Atlantic City; we will continue to move and market the consumers back and forth. Atlantic City in January is different than May through October.”
Despite his optimism about the two projects living in harmony, Allen said the city must continue to show signs of improvement to continue to entice visitors.
“We have to be cautious about the land-based casinos over the next 10 to 15 years, especially the regional ones,” Allen said. “If it’s not a destination, there is a fair overview of cautions. Pacific Avenue needs a beautification,” he said. “It’s very important so that when guests come to A.C. they see new things happening.”
Small said the stakeholders in the city will continue to work to make the resort attractive to visitors.
“As we work to diversify our economy in the Great City of Atlantic City, the casino industry remains a vital part of our town, that’s never going to change,” Small said in a statement Thursday. “The relationship between the city, CRDA and all of our partners in the casino industry has never been stronger. We understand what’s about to happen up north, but we will continue to work together to put Atlantic City in prime position to succeed and make this City the best it can be, regardless of where other casinos are opening.”
And the city’s casinos might be in better shape this time around to handle more gaming competition in the Northeast, Bokunewicz said.
“Operators are in some ways ‘holding a better hand’ than they were in the years leading up to the closures in 2014. Despite the economic disruption around the pandemic in 2020, and recent cost increases, Atlantic City’s casinos are generally on a better financial footing than they were in the past when several properties (Revel in particular) were carrying a lot of debt in a period marked by year-over-year declines in gross operating profit,” Bokunewicz said.
The Associated Press contributed to this report.
