The state of New Jersey is monitoring closely the rise and fall of gambling revenues for the area. Not only is Atlantic City the second largest gambling community in the country, but the overall decline of the resorts in this area is becoming a real concern. The state depends on the massive revenues that are reported by these honorable establishments in this area. However, since the online gambling community is in full swing, the land-based establishments are certainly taking a major hit. For the month of August 2015, the gaming revenues dropped drastically. This leads to an overall decline in the gambling halls within the past month.
The city depends on eight major resorts to bring in the money they need to operate. Even a drop in revenues as small as five percent can be a huge problem. For the month of August, the casinos reported revenues from their slots machines and tables games that were $258.6 million. The Division of Gaming Enforcement released the reports this past Monday and shows that at this time last year, the casinos were bringing in revenues that were in excess of $272 million. That puts the grand total for the month of August at a loss of five percent. It wouldn’t be so bad to lose five percent one month if you had net gains in the previous months. However, it was fortune that July showed a profit of more than nine percent. A constant streak of losses means nothing more than trouble for the industry, but the months where there is a profit is encouraging.
The city has already experienced the closing of a few of the major establishments in town due to bankruptcy and the decline of revenues. When Trump Plaza was closed, it put a major impact on the revenues. The fact that such an important part of the city’s economic structure is dwindling is very concerning. Does this mean that we will continue to see these land-based units crumble under the pressure of the online gambling community? It’s true that online gambling is taking a big portion of the business, but New Jersey is also accounting for that money in their revenue reports.
So the loss isn’t just for land-based casinos, but the online communities are also at a loss. One theory is that people are just spending less and trying to be more frugal. However, another is that the illegal establishments that are not reporting are taking charge of some of the revenue. Yet another theory is that new casinos opening in neighboring states are taking away some of the money that normally would belong to New Jersey.
With the reports that there were issues, officials made note that the Labor Day holiday fell in September this year, but last year it was in August. So this could have inflated the revenues for that month, which resulted in the reports from this year to look off. The Casino Control Commission’s chairman, Matt Levinson, said that the numbers are painting a picture that is all roses. However, the data overall shows a slight increase of just over 3 percent combining the 8 casinos revenues. It’s hard to just look at one month and try to get a clear picture. Rather, one must look at the entire year as a whole to see the ebbs and flows before making any rash judgments. The overall picture is New Jersey is in the black, if only by a small margin.
The reports show that the revenues are down 15 percent from August of 2014. Though officials want to paint a pretty picture, there are still many concerned about the overall state of the economy. In the past year, the casino industry has taken a major hit. In January of 2014, The Atlantic Club was the first major casino to shut its doors. In August of 2014, Showboat Casino followed suite. The Biggest hit came in September of 2014 when Revel and Trump Plaza both closed for good. Many didn’t think they would ever see the day that Trump Plaza would close, as it has been a stable casino in the area since 1984. The fact that casinos that have been around for more than thirty years are closing operations has everyone on edge. Could Atlantic City be heading for a financial breakdown?
The drop in revenues for the month of August is after many months of profitable gains from the casinos still in operation. July showed an increase of over eight percent alone. When pulling out the casino with the steepest decline, it would have to be Caesars. They showed a drop of about 28.6 percent this August when compared with August of 2014. Trump Taj Mahal also showed a loss at 24.2 percent of revenues. The Golden Nugget, along with the Borgata saw the revenues climb last month, and it was enough of a lead to put the loss at a minor number instead of a major one. Leading the pack with an increase over more than 27 percent was the Golden Nugget.
Atlantic City is not ready to give up just yet. They have seen lean times before and certainly there will be lean times again. It’s all just a matter of the business and considering the ups and downs of the entire gaming community. As long as they stay in the black, things will be okay. However, some of the deadweight casinos that are having trouble may soon fall off the map all together. With so many that have already closed, it is a concerning matter that is never far from comprehension. Things seem to be just treading water at this time. One sudden move could pull their economy under.