In New Jersey and a new state-backed investigation has reportedly determined that the nine-casino market of Atlantic City is currently oversaturated and that this state of affairs may be hampering local operators as they endeavor to invest in their venues.
According to a Sunday report from Casino.org, the study from Rutgers University’s Edward J Bloustein School of Planning and Public Policy was commissioned by the Atlantic City Working Group of New Jersey Governor, Phil Murphy, in an effort to aid the debate as to whether the eastern state should institute a cap on the number of Boardwalk casino licenses.
Although aggregated gross gaming revenues in Atlantic City increased by 22.9% year-on-year for October to reach $293.9 million with seven of the seaside city’s nine casinos posting modest rises, the examination reportedly determined that most of this improvement was down to the Ocean Casino Resort and the Hard Rock Hotel and Casino Atlantic City. Both of these venues recently celebrated their first-year anniversaries with the assessment purportedly showing that they have simply been cannibalizing business from their older rivals rather than bringing in new gamblers.
Reportedly read the evaluation…
“The second quarter of 2019 marked a full year of operation for the two new casinos. In that time, Atlantic City’s gaming revenues have grown by about $280 million, roughly the average revenue of one casino in the city over the four quarters ending in the second quarter of 2019.”
Casino.org reported that the study additionally suggested that this lack of new business is leading to a fall in profitability, which is crimping cash flows and hindering operators’ ability to invest in their venues so as keep them current for gamblers and guests. The research purportedly moreover advised that this situation may become even worse next year due to the increased competition engendered by the expected opening of the Live! Hotel and Casino Philadelphia in nearby Pennsylvania.
The New Jersey investigation reportedly utilized statistical analysis to model what potential impact the debut of a new 2,000-slot casino like the Live! Hotel and Casino Philadelphia would have on Atlantic City. It purportedly found that such an opening would push average annual property gross gaming revenues down by over 15% to $283.6 million with associated mean slot takings diminishing by some 13% to $146,000.
The evaluation reportedly read…
“Gross gaming revenues in Atlantic City declined by over 50% from their 2006 peak of over $5.2 billion to just over $2.5 billion in 2018 and this effect further diminishes any growth-inducing capacity of new casinos in Atlantic City.”