Atlantic City May Suffer More Casino Closures By 2020

In 2014, Atlantic City saw four of its casinos shut, including the Atlantic Club (Jan), Showboat (Aug), Revel (Sept), and Trump Plaza (Sept). This year, New Jersey’s remaining eight casinos have benefited from the reduced competition, with adjusted revenues, not including the now defunct casinos, higher by 5.3% year-over-year.
While this may seem rather encouraging, Moody’s Investors Service believes that the casinos will not be able to enjoy their consolidated position for much longer, with the credit rating company ominously predicting that increased competition from neighboring states will heap extra pressure on AC’s remaining casinos, forcing some to go out of business. The competition mentioned revolves around eight new casinos costing a total of $5 billion which are expected to open over the next three years across the states of Maryland, Massachusetts, New York and Pennsylvania.
Adding to Atlantic City’s misfortunes is the fact that as the number of alternative gambling venues increase, gamblers are unlikely to go out of their ways to reach AC casinos, which are located far from the regions major population centers. As Moody’s analyst Peter Trombetta explains; “It’s very unlikely someone is going to drive past one casino to go to another casino if they have similar offerings.”
While Moody’s did not specify which of Atlantic City’s casinos are likely to fail over this period, the three which spring to mind are those which are already in Chapter 11 bankruptcy, and so are obviously most at risk of going belly-up. These include Trump Taj Mahal, Caesars and Bally’s, and as a Moody’s statement explained:
“As the number of casinos shrinks, some of the remaining casinos have seen revenues increase. But we expect increased competition will keep the heat on incumbents, and that number of casinos in Atlantic City will likely continue to shrink. We expect more casino closures to occur in Atlantic City as some struggle to grow their business and face additional competition.”