Atlantic City casinos will likely see a decline in foot traffic with the advent of three casino licenses soon to be awarded in the New York City area. The looming specter of this northern competition has Boardwalk operators and politicians on edge.
Crowded Room
It wasn’t long ago when Atlantic City and its nine Boardwalk casinos were considered the Las Vegas of the East. Although the area has had its share of ups and downs, operators have recently been investing millions of dollars in redecorating and reinvigorating their properties.
The conventional wisdom is that Atlantic City will have to redouble its efforts if it wants to be considered a more attractive option than any one of the three New York City resort casinos that have yet to be built. The room suddenly got more crowded, and wooing New Yorkers across the border will take time and money.
Hard Rock Exec Sounds Alarm
The Hard Rock, one of Atlantic City’s most successful casinos, along with the industry-leading Borgata and Ocean Casino Resort, is also one of the bidders for a New York City license, currently teaming with Mets owner Steve Cohen on the Citi Field project.
Jim Allen, chairman of the global Hard Rock casino, entertainment, and hospitality company, had a dire warning for his fellow Atlantic City casino colleagues. Speaking in an interview with the Associated Press after the East Coast Gaming Congress last month, Allen shared his vision of what could happen when the New York City casinos begin operating.
“It could happen. Atlantic City receives 20, 30-plus percent of its revenue from upstate New Jersey and downstate New York, and there’s no doubt it is going to have an impact on this particular market,” said Allen.
“So, you have three or four that are very strong, and then I think there’s a question as to what happens in that next level down,” he said. “I think it’s a concern that if these other casinos don’t perform, then inevitably, from a business standpoint, is there vulnerability? I don’t think that changes unless there’s an enhancement to the perception of Atlantic City.”
Atlantic City Must Be Resolute
The problems facing Boardwalk casino operators emanate from the many choices people have in today’s gaming industry. Online casino gambling is taking a bite out of the Boardwalk’s foot traffic as people no longer have to drive to gamble when it is only a few clicks away on their PC or mobile device. Although the casinos do get a piece of the iGaming action, they must share a large portion of the profits with third-party providers, ala Caesars, DraftKings and FanDuel, to name a few.
Now, in addition to online casino gambling, comes a threat from the north, as these licenses, yet to be awarded, will one day become gleaming state-of-the-art gambling palaces and entertainment venues. This adds even more pressure on the Boardwalk operators to take action before the problem becomes too big.
David Schwartz, a gambling historian with the University of Nevada, Las Vegas, said the measures taken by the Atlantic City casino owners will determine the fate of their operations.
“While it’s possible that one or more casinos could fold their tents and exit the market, there is also an opportunity for casinos to expand their offerings and give New Yorkers a reason to drive down to Atlantic City. After all, millions of people who live within a short drive of casinos fly to Las Vegas every year. Diversification of amenities and a focus on superior customer service for gamblers might offset the convenience of ‘local’ casinos in New York.”
