A.C. will retain most of the revenue from closed casinos, Fitch forecasts

Atlantic City lost two of its 11 casinos over the weekend, Showboat and the Revel. But can it hold on to their displaced customers?

 

 

The Fitch credit-ratings agency predicts that Atlantic City could retain a large part of the business generated by the three casinos eventually disappearing from the boardwalk. That includes as much as 75 percent of the gambling revenue from Showboat, 50 percent from Revel and 60 percent from Trump Plaza, scheduled to close Sept. 16. 

A lot of the properties have been full. but that’s depended on high marketing and promotional costs. Having a shot at the big spenders who will need a new favorite casino could help the remaining casinos’ bottom line, said Alex Bumazhny, who directs research at Fitch on gaming and leisure.

“It’s just going to be trying to find the better customers and trying to attract them into their properties,” he explained. Meanwhile, the remaining casinos will spend less on marketing to compete with their neighbors for customers.

“For existing operators it’s definitely good news,” he said.

Atlantic City’s remaining eight casinos will still be competing with the other states that now offer new gaming destinations. That increased competition was blamed in part for the steep decline in the resort’s gaming revenues since 2006.

Fitch has predicted Atlantic City’s overall gambling revenue continue to decline next year, even though it’s not expecting any more casino closings for at least the next two years.

The University of Nevada, Las Vegas’ David Schwartz was more cautious about predicting the future.

“A lot of it depends on how the industry reacts — if they’re able to successfully market Atlantic City, and if they’re able to keep people coming there and add new attractions,” he said. “If they are able to do that,  you could see the market do well. If not, if they don’t do anything or the city continues to decline, you could see it continue to shrink.”

It’s still possible a buyer could come in and reopen one of the gaming halls under a new brand, but the three closings within two weeks already are putting 6,000 people out of work.