New York Casinos Sounds Death Knell For Atlantic City

If the situation wasn’t already bleak enough for Atlantic City, things are about to get a whole lot worse after New York approved the building of seven casinos inside the state within the next seven years.
The east coast gambling resort reached its peak in 2006 having generated a total revenue of $5.2 billion, but by 2012 that tally had declined to just $3 billion, and so far for the first nine months of 2013, Atlantic City casinos are currently down 9.3% at $2.2 billion. At the heart of Atlantic City’s woes is the massive increase in competition it has experienced from neighboring states, and last year Pennsylvania actually replaced Atlantic City as the country’s second biggest gambling resort.
With the news that New York City, as the biggest feeder market into Atlantic City, is also preparing to join the bandwagon, question are now being asked about the long term viability of Atlantic City’s gambling industry. In addition, Atlantic City’s other rivals are likely to face a reduction in expectations, too, and as New York Gov. Andrew Cuomo, explains:
“New Jersey has casinos. Connecticut has casinos. Pennsylvania has casinos. We literally hemorrhage people from the borders who go to casinos. I think it will keep the money in this state and I think it is a major economic development vehicle for the Hudson Valley especially and for upstate New York.”
Despite Atlantic City’s decline, New Jersey is at least hoping to give its gambling industry a boost when its eventually launches legal internet gambling this year. Online gambling is expected to generate an additional $1 billion in revenue during its first year of operation, but whether these amounts will be enough to reverse future expected declines is doubtful. As Harold Vogel, the CEO of Vogel Capital Management, explains:
“Atlantic City’s time has come and gone. It was second after Nevada, and it was a special place in a small location. It had 10 good years when it was pretty unique, but then we got Indian casinos, and then gambling in Pennsylvania.”