The gaming industry publication Gambling Insider shook up the casino world recently with this headline dated September 18, 2015: “Atlantic City operators suffer miserable August.” The business-to-business journal, which is read by professionals in the gambling industry worldwide in both print and online form, wasn’t talking about the stifling heat and humidity along the Atlantic Coast. Sharp drops in gambling revenue at most of the Atlantic City casinos during the month of August triggered the outcry.
The New Jersey Division of Gaming Enforcement stated that during August of 2014, five of Atlantic City’s eight operators experienced falling wins (income). This year, the same five operations again failed to escape the August doldrums of declining revenues. Venerable casinos like Caesars and Trump Taj Mahal suffered double-digit revenue declines compared to August 2014 figures. Caesars took the worst hit with a 28.6% drop of $31.4 million. Trump Taj Mahal was next in line with a 24.2% reduction of $18.9 million. Harrah’s, Bally’s and Tropicana were also down for August year to year, but not nearly as much.
Three gambling operations actually show win increases over August of 2014. The Borgata showed an increase win of 7.9% to $71.1million while the Golden Nugget win grew by 20.4% and The Resorts Casino reported an 18% win increase.
Despite the sour-puss headlines for August, seven of Atlantic City’s eight surviving casinos have actually shown a profit increase for the first half of 2015 over 2014. The eight survivors saw a combined 12% profit increase in 2014, but that was due mainly to a ‘down-sizing’ in the market after four casinos closed at the end of 2013. When compared to the peak year of 2006, overall revenue for the Atlantic City casino operations have fallen nearly 48%.
Overall, 2013 was not a banner year for Atlantic City casinos. On August 31, the Showboat Casino Hotel closed. The Revel followed suit September 2, 2013, followed by the September 16 shutdown of the Trump Plaza Hotel and Casino. More than 5,000 workers lost their jobs with those three closings. Another 1,600 jobs had already disappeared when the Atlantic Club Casino Hotel closed earlier in January. With the August disappointment now on record, the year 2015 appears to be on the same downward track.
The one bright spot in the overall picture for New Jersey gambling, according to Gambling Insider, was the continuing growth of online gaming revenues with a 15.8% increase to $12.2 million. This helped ease the loss of revenue from the brick and mortar land-based casinos.
Total New Jersey 2015 gaming wins from January through the end of August were down 10.3% to $1.73 billion compared to the same period last year. If the month of August 2015 was a fore-bearer of things to come for Atlantic City, there could be more misery ahead.
On the other hand, August was miserable everywhere. The stock market had its worst performance in five years according to CNN Money. The Dow Jones Industrial Average (DOW) dropped more than 1,100 points for the month, a fall of 6.6%. That’s the biggest monthly percentage drop since May of 2010.
August also saw presidential politics raise its ugly head as a dozen or so Republican candidates filled the television screens with vitriolic diatribes that made them look like they were trying to destroy each other while also striving to devour Hillary Clinton. A man named Trump, the same Donald Trump whose name still graces an Atlantic City casino, led the high-profile charge. Whether this was good or bad for Atlantic City is anyone’s guess.
August, of course, brings heat and humidity. Everyone is miserable when both numbers race up toward triple digits. Suffocating days and sweat-soaked nights bring out the worst in all of us.
Weather aside, the most obvious challenge to Atlantic City’s gaming future is competition from other gambling venues near or far. When the Resorts Casino Hotel first opened its doors in Atlantic City on May 26, 1978, it was the first legal casino opened outside the state of Nevada in the entire country. Today twenty three states have legal casinos within their borders. Many of them are within driving distance of Atlantic City which means former Atlantic City gamblers can play closer to home.
The explosive growth of Indian Reservation casinos in the Northeast, some of which rival or even outdo the opulence and amenities offered by Atlantic City hotels, has also taken a large chunk of business from the New Jersey casinos.
Meanwhile, Las Vegas, rather than face a decline in their casino business because of the competition from Atlantic City and elsewhere, continues to build newer and bigger hotel casinos. This past month, grandiose plans were announced that China would be supplying high-speed trains for the long talked-about express rail service between Los Angeles and Las Vegas. This means only more business ahead for the casino city in the desert.
As stated above, online gambling could bring some relief to New Jersey’s decline in gambling revenue, but it doesn’t draw the visitors who stay in the Atlantic City hotels and gamble in the casinos and eat at the restaurants.
On the day New York City approved video black jack machines earlier this year, a newspaper quoted a man in Brooklyn as saying he was glad he no longer had to travel to Atlantic City to play his favorite game. Unfortunately, that sentiment might be stronger in the hearts and minds of those who still travel to Atlantic City for their gambling pleasures then the casino operators would like to believe.