ATLANTIC CITY (N.J.) (AP), panelists said that the construction of three casinos in New York would cost Atlantic City between 20% and 30% of its revenue. This could bring the resort back to the days when it had to close casino.
Jim Allen, Chairman of the Hard Rock Casino, Entertainment and Hospitality Company, said on Thursday that a drop in revenue could cause at least one Atlantic City gambling establishment to close. Hard Rock, the owner of a casino in Atlantic City is one of several bidders to build a New York Casino.
Allen, speaking at the East Coast Gaming Congress in New York warned that New York’s upcoming casinos will have an impact on Atlantic City.
Allen said in an interview with The Associated Press after his speech, 'It's possible'. Atlantic City gets 20, 30, and more percent of its revenues from upstate New Jersey, and downstate New York. There's no question that it will have an effect on this market.
Allen's Atlantic City Casino, the market leader Borgata and Ocean Casino Resort, are the current top-performing casinos on the market based on the amount of money that is won by in-person players.
He said: 'So, you have three to four casinos that are strong. Then I wonder what will happen at the next level.' I think it's a concern that, if these other casino's don't perform well, there will be vulnerability from a business perspective. I don't believe that will change unless the perception of Atlantic City is improved.
Allen is a frequent critic, expressing his concerns about the conditions in Atlantic City. This includes visitors' perceptions regarding cleanliness and safety. Allen acknowledged that progress had been made but added that more needed to be done.
Mark Giannantonio of Resorts Casino, and the Casino Association of New Jersey declined to comment on Allen's comments.
At the same Wall Street conference on Wednesday, a number of Wall Street analysts predicted that New York casinos would take a big bite out of Atlantic City’s business.
Duane Bouligny, managing Director at Wells Fargo, said Atlantic City casinos with good leadership and who continue to invest in the business will grow.
He said that 'the ones who don't will either get right-sized, or they'll be shut out of the marketplace'.
David Schwartz is a gambling scholar at the University of Nevada Las Vegas. He said that a lot will depend on how the nine casinos in Atlantic City react to this new competition.
He said that while it is possible for one or more casinos to fold up their tents and leave the market, casinos have an opportunity to expand their offering and give New Yorkers another reason to drive to Atlantic City. "After all, every year millions of people from nearby casinos fly to Las Vegas. The convenience of New York's 'local' casino might be offset by diversification of amenities, and an emphasis on superior customer service.
Allen stated that the monthly revenue figures reported by the State are misleading because they include sports betting and Internet gambling revenue. This money is to be shared among third-party providers, and not just the casinos.
Since last May, the casinos' main business, which is money from players in person, has been either flat or going down, depending on where they are located.
Atlantic City has tried to diversify their business model for many years in order to become less dependent on gambling. This has included investing in new hotel rooms and restaurants, entertainment venues and conference centers, as well as shopping and personal-care amenities.
Caesars Entertainment will add a new entertainment facility and a Vegas style residency show to its $100 million water park that is set to open in this year.
The decision about who will be awarded the licenses to build casinos is expected later in the year.
Hard Rock announced plans to build a casino near New York City in northern New Jersey Meadowlands before voters overwhelmingly rejected a statewide vote on the issue. He said that the plan "is still there" but Hard Rock is, like others, 'trying' to assess the landscape. It depends on the opportunity.
Allen said there were no plans to hold another referendum regarding a casino in north Jersey, and that he did not know of any intention among lawmakers to bring the issue up again soon.
Jeff Gural who owns the Meadowlands Racetrack, where a Hard Rock Casino would be built, stated that New York casinos "would make it easier for [him] to get a gambling establishment in the Meadowlands."
He said: 'I cannot imagine that people would prefer to drive over the George Washington Bridge and pay $18 tolls while sitting in traffic to go to a casino at the Meadowlands.'
Allen's description of the threat posed by New York casinos was a parody on Atlantic City mayor Marty Small's signature phrase, "It's a great day in Atlantic City."
He said: 'I'm telling you, if we lose between 20 and 30% of our business it will not be a good day for Atlantic City.
Wayne Parry is on Twitter.