As Atlantic City casino revenue falls 13%, ‘bumpy ride’ forecast
Revenues for the month of June in Atlantic City casinos are down a combined 12.6 percent from last year, a disappointing start to summer for businesses hoping to rebound following Superstorm Sandy.
Revenues have fallen 40 percent since peaking in 2006, as casinos in Atlantic City compete with newer gambling venues in Pennsylvania, Delaware, New York and Maryland.
Atlantic City’s losing streak crosses casino floors; each gaming house in town posted lower revenues last month than it did in June 2012.
That pattern of declining gaming revenue is here to stay, said Cory Morowitz of the Galloway, New Jersey-based strategic and financial consultants Morowitz Gaming Advisors, LLC.
“It’ll be a bumpy ride,” he said, “but I think the trend is generally going to be down.”
But according to Israel Posner, director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Richard Stockton College of New Jersey, the rollercoaster ride could finally be leveling off.
He said the supply of gambling is, at last, reaching equilibrium.
“If you think about where this industry was half a dozen years ago, it was focused on Atlantic City and that meant that the market came to the supply,” he explained. “What’s happening now is that the supply is really going out to where the demand is, toward the population.”
“There is a natural sense of balance,” he added.
Betting on A.C.
Gov. Chris Christie entered office with an ambitious plan to rekindle interest in the seaside resort town, including a $30 million bet on a marketing campaign pitched at visitors interested in more than gambling.
Christie embraced the newest resort in town, Revel, when it debuted in April of last year. Revel billed itself as different from its neighbors, with a luxurious spa, gourmet chefs, and a smoking ban throughout the space besides the usual gambling offerings.
That strategy flopped. Revel lost $111 million its first year, filing for bankruptcy in February. It’s since reopened — this time with a new promotion for loss-free slot machines and a smoking floor.
Its revenue this month is down 22 percent compared with last June.
So the city’s “Do AC” marketing campaign is now touting concerts, restaurants, the beach, public art installations and, yes, gambling on a tour throughout the mid-Atlantic region.
Still, Morowitz predicted that more diverse attractions would be a bigger slice of casino revenue in the years to come. He said he’s advising casino clients to continue investing in entertainment and food options.
As far as gaming goes, the city may yet have a card or two up its sleeve.
In February, Christie’s signature made New Jersey the third state to authorize Internet gambling from laptops and mobile devices.
The governor has also tried his luck in the courts, where he is fighting a federal ban on sports betting, a challenge to a law he signed last year that would legalize it in the state.
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