NJ Casino Expansion: To Be or Not To Be!August 9, 2016 12:51 pm
Atlantic City’s Trump Taj Mahal is set to shut on October 10th, with around 3,000 people subsequently expected to lose their jobs. Less than a month later, New Jersey voters will then decide whether or not it is in the state’s interest to authorize the building of two new casinos in the north of the state near to New York City.
It is a reflection on the fragility of New Jersey’s casino industry, however, that voters appear split on whether allowing casinos to be built away from their historic Atlantic City location would increase casino business, or leave AC’s remaining casinos struggling in the face of increased in-state competition.
Those in favor of expansion believe that Atlantic City’s casino market has already lost its attraction for its former visitors, and that building new casinos away from the sea-side resort would instead encourage them to spend their money elsewhere in New Jersey, rather than travelling to more attractive resorts in other states. Furthermore, money generated in north Jersey could also be used to revitalize Atlantic City’s crumbling infrastructure, with some estimates putting the potential contribution at around $200 million per annum. As Senator Paul Sarlo explains:
“Expanding New Jersey’s gaming sector to North Jersey will provide financial resources so that Atlantic City can invest in economic expansion. The city has the opportunity and the ability to become a destination resort that doesn’t rely on casinos alone.”
The long-term benefit of such an expansion is not quite as clear-cut, though, with Moody’s Investors Service warning that a number of other casino projects expected to be completed in nearby states over the next couple of years will inevitably make any gains short-lived. This includes at least eight new casinos opening up by 2018 in Maryland, Massachusetts, New York and Pennsylvania, including the MGM National Harbor casino expected to be operational within the next couple of months. As Moody’s stated at the end of last year:
“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.”