Is Losing Streak Broken for Atlantic City?
Atlantic City finally got a reprieve from their 10-month stretch of declining revenues apparently thanks to it being a leap year. The 1.5% increase over last February wasn’t impressive but it finally gives casino operators a glimpse of the light at the end of the tunnel. “The extra day helped, and it was a Friday, which is always a busy day,” was the explanation for the increase given by Carlos Tolosa of Harrah’s Entertainment.
Long the gaming center for the eastern seaboard, Atlantic City experienced an overall decline in revenues last year of 5.7% according to the NJ Casino Control Commission. This is the first drop in the history of the city and comes as quite a blow to the industry. While February was up, the first two months of 2008 together are down 4.4% compared to last year.
New slot parlors opening across Pennsylvania and New York drew many gamers as they were closer to home. Buses bring visitors to Atlantic City from up and down the coastal states. These bussed in visitors come to town for the day, typically spending only small amounts, and then they are bussed back again in the evening. Known as day-trippers, these have made up the majority of the day-to-day gamblers thronging the Atlantic City casinos.
The partial smoking ban that was enacted in April 2007 also contributed to the 10-month slump. The law required all gambling halls to limit smoking areas to only 25% of the casino floor. The drop in revenue was expected after seeing Delaware’s slot parlors falling 10% after that state passed a complete smoking ban back in 2002.
Casino executives aren’t getting too excited over February’s increase yet. Tolosa has said that he fully expects March to show a decline again and he doesn’t believe revenues will turn around completely until as late as June. He stated, “I don’t think we’ve normalized yet”. CEO of Trump Entertainment Resorts, Mark Juliano put it this way: “You’re not throwing your hat in the air, but we’ll take victories where we can get them”.
So where does Atlantic City go from here? Juliano puts the emphasis on casino operators needing put more effort into attracting longer term visitors. He stated that “all the major players here need to work really hard to transform Atlantic City to the next plateau, a place where people come and stay for two or three days…” Apparently the other players agree as big expansions have begun on several of the major hotels and a casino-hotel is planned to open in 2010 where the Atlantic City Sands once stood. Casino owners are collaborating with NJ Transit to begin luxury train service connecting New York City and Atlantic City, as well.
Industry experts predict that Atlantic City will rise above the latest challenges with the ongoing construction and the new focus on non-gaming areas like nightclubs, spas and big-name entertainment. Of course, Donald Trump has a positive outlook on the future. As he says, “Long term, Atlantic City is going to be just fine. It has something no one else has – the ocean.”