Is This The Death of Atlantic City?
2014 has been a rough year for Atlantic City. This East coast gambling haven has borne the brunt of the recession, and a highly competitive casino industry that is now overpopulated with casinos. Neighbouring states in Pennsylvania, Delaware, New York and Maryland are in the midst of building their own casinos, thereby diluting the traffic to Atlantic City. Declining revenues have caused the shuttering of 4 casinos in 2014 alone. These include the closure of the Trump Taj Mahal, Showboat, Revel Casino, and Trump Plaza Hotel and Casino. These closures may well have been perceived as the death knell for Atlantic City, but the remaining casinos are fighting fit to keep the doors open and begin expanding operations.
The issue is a simple one: supply & demand. There are simply too many casinos operating in the region for any of them to be as profitable as they would like. The shuttering of the Revel Casino was particularly painful for Atlantic City, since this establishment came at a price tag of $2.4 billion. When it filed for bankruptcy for the second time in June 2014, all bets were off. Now it appears that Brookfield Asset Management won the bid to buy the Revel Casino with a $110 million offer that was accepted on 1 October 2014. Even the revered Trump Entertainment (Trump Taj Mahal Casino Resort & Trump Plaza Hotel & Casino) was unable to stop the rout that had befallen casinos in Atlantic City. This begs the question: Is there any way to stop the rapid degradation of Atlantic City casinos?
The Future of Atlantic City Remains Uncertain
During its heyday – in 2006 – Atlantic City casinos generated $5.2 billion in revenues. While that pales in comparison to Las Vegas casinos, it is substantial by anyone’s admission. Fast forward a couple of years to 2013, and it is clear that Atlantic City casinos are operating at sub optimal levels. Present estimates for annual revenue or in the region of $2.5 billion. The costs befalling the Atlantic City community and neighbouring communities are enormous when casinos shut down. It has been estimated that some 8,000 jobs – 25% – of the hotel and casino industry’s employment prospects were wiped out by the shuttering of these 4 casinos. It’s hard to be optimistic with so many job losses, especially with an additional 3,000 jobs likely to be lost when a fifth casino closes this month. This has painted a dark picture for New Jersey job growth in 2014.
This has prompted some experts to call for a ‘Breakout Industry’ in New Jersey to ignite another economic boom, in much the same way that Atlantic City successfully did in the 1970s. The only problem is: nobody knows precisely what the next breakout industry may be. In total, an estimated 260,000 jobs have been lost since the start of the recession in 2008 through 2011. Less than 50% of those jobs have been recovered to date. In the year from October 2013 – October 2014, an additional 9,200 jobs were added in New Jersey, and the state as a whole is expected to add 11,500 jobs by the end of the year. That translates into an annual growth rate of 0.3% and that’s 0.9% lower than the growth rate in 2013. The present figures suggest that 25% of Atlantic City’s jobs have been wiped out, but if the Trump Taj Mahal closes, 33% of the city’s jobs will have evaporated. That translates into a total of 8% of all the jobs in Atlantic City.
What is Being Done to Stop the Rot In Atlantic City?
There are various initiatives taking place that literally have nothing to do with maintaining Atlantic City’s dominance as an East Coast gambling enclave. For example the famed Showboat Casino is reportedly now owned by Richard Stockton College and there are plans to convert the $18 million purchase into a new dormitory and branch campus. The Showboat occupies 28 acres on the beachfront and has 1,329 hotel rooms. It has been speculated that the casino floor would become admin offices and the theatres would become facilities for drama programs, music programs and dance programs. One of the 3 towers at the Showboat will remain a hotel with 479 rooms. It is slated to open in 2015. Richard Stockton College announced that the dorm rooms could be used as hotel rooms during summer when the students are away from school. The chief entertainment officer at Caesars Entertainment – Gary Loveman – said that the diversification is a good thing, even if it’s not being used for gambling purposes.
There are other plans in the offing to open boutique hotels in Atlantic City. For example the owner of the Chelsea Hotel is considering setting up a small casino in Atlantic City under the auspices of a bill being considered by New Jersey lawmakers. The 330 room hotel proposal is presently being deliberated by officials from the state legislature. According to the provisions of the bill, it would not be mandatory for the casino & hotel to expand to 500 rooms and there will be no requirement to construct a new facility, since it will set up in an existing facility. The bill under discussion is sponsored by state Senate President Steven Sweeney and Sen James Whelan. It is hoped that the boutique hotel and casino will attract niche customers that will be able to play at up to 30 tables located on the hotel’s fifth floor. The Senate will be considering this proposal alongside talks to build owner-occupied residences across Atlantic City, where 75% of residents currently rent. Atlantic City’s Mayor Don Guardian also has a recovery plan in mind for the city. Among his suggestions are finding alternative revenue streams for the school district, stabilising tax rates for casinos and reducing the municipal payroll. The major obstacle – according to the mayor – remains the tax burden on casinos. The city will see its Police Force reduced by 45 officers, the Fire Department will lose 25 firefighters and a federal grant for firefighters will not be renewed when it expires in 2015.
What’s Hot in Atlantic City This Christmas?
Presently, the following casinos are still operational in Atlantic City: Bally’s Atlantic City, Borgata Hotel Casino & Spa, Caesars At Atlantic City, Golden Nugget Atlantic City, Harrah’s Resort Atlantic City, Resorts Casino Hotel, Tropicana Casino Resort and Trump Taj Mahal Casino Resort. Combined, Atlantic City offers visitors an impressive range of entertainment options, from penny slots to high roller entertainment at the baccarat, roulette, blackjack and poker tables. Beyond gambling, there are plenty of shows taking place at these resorts, with big-name stars regularly in attendance. For example, The Pier Shops offer a wide variety of high end couture and restaurants – with something for everyone. Gear Up Paintball, A1 Tours, the beaches & boardwalk, sports & outdoors, dining, gay & lesbian, arts & culture, spas and nightlife abound. Atlantic City truly is a cosmopolitan entertainment paradise catering to one and all. It may not have the swagger of Las Vegas, but it certainly has the beach and its close enough to New York City to make it a prized location for revellers in seek of non-stop entertainment.
New Jersey Now Offers Regulated Online Gambling
There is also something else that Atlantic City – and all of New Jersey – now has: online casino gaming. New Jersey is one of three states in the US that now allows players located anywhere in NJ to play online casino games. Governor Chris Christie regulated online casino gaming in November 2013, and several of the big land-based casinos now have their own online casinos running. Examples include CaesarsCasino.com and Harrah’s Online Casino. Players who are at least 21 years of age and physically located in New Jersey can play fully regulated online casino games for real money. State-of-the-art technology and geolocation tracking technology has made it possible for all New Jersey residents to enjoy the perks of Atlantic City across the state. If online gaming takes off, it will certainly be a complement to the state’s gambling industry!