With Atlantic City’s scenic seashore location and dense regional population, AC should continue as a dominant casino/entertainment destination. But things don’t work that way here along the Boardwalk in Atlantic City.
Some recent thoughts on the ‘s’ storm that Atlantic City finds itself in today.
Some still pat themselves on the back for keeping gaming out of North Jersey for a few more years. These are the same folks that still fail to appreciate the rabid growth of competition from outside our Garden State borders.
Others celebrate gaming revenue gains that will likely NOT make Atlantic City safer and more business friendly. We can thank the insane PILOT bill for that.
Real Factors Hurting Rebound of Atlantic City
- MGM Inner Harbor
- PA casino expansion
- Internet gaming
- Harmful restrictions holding back TAJ MAHAL & REVEL / TEN
- Union picketing and demands
- Legislative roadblocks.
- New Biz-Dev red tape
- Combative Mayor Fighting State, County & Entrepreneurs
98% of potential visitors to Atlantic City, are closer to PA casinos & slots at Aqueduct / Yonkers.
AC no longer gets the mid-week slot player. That’s 200 days and nights a year in the off-season, in the Fall, Winter and Spring. Early week room rates in AC are discounted 80% to 90%, compared to Saturday.
At one time, Atlantic City attracted millions with casino bus customers. This bolstered mid-week casino play, restaurant & entertainment revenue. According to Casino expert Steve Norton, those number have declined by over 90%.
Pa. casinos like Sands Bethlehem, Parx, Sugarhouse and Harrahs Chester are a much shorter & convenient trip than Atlantic City.
- Atlantic City derives 70% of its revenues from gaming. Las Vegas is under 35%.
- Of the 23 largest Las Vegas strip properties, gaming produces just 27% of overall revenue.
Las Vegas saved itself by discovering the convention/trade show business. It fills mid-week rooms at rates that are often higher than on weekends. Occupancy and average room rates can be 20% higher than our Atlantic City casino resorts.
Steve Norton: In spite of the lower occupancy and rates, AC casinos still comp over 50% of room, food and beverage sales.The Vegas Strip gives away only 27%.
Atlantic City Convention & Trade Show Opportunity
With potentially 20,000 rooms, AC has much larger capacity than Philadelphia. AC could offer mid-week rates that are 1/3 of Manhattan; where convention/ trade shows and business travelers push mid-week rates higher than weekends.
AC has a wonderful environment for the convention trades. Plenty of meeting and exhibition space, and close proximity to city accommodations. But lack of air service from major hub airports is a real freekin’ problem.
A robust airline selection would really fire-up the AC meeting business, creating new casino customers from areas like Atlanta. They have no convenient casino gaming. But, Atlanta does have over 90 flights a day to Las Vegas. Compared to Vegas, AC is much closer and is in the same time zone.
How MGM dominates east coast.
MGM just opened its $1.4 billion casino at National Harbor in Maryland. An easy ride right down I-95. It’s Maryland’s sixth casino. Overlooking the Potomac River, MGM Inner Harbor created 4,000 new jobs. Many laid off casinos workers from AC, left town to grab those shiny new jobs.
Casino Over-saturation Along The East Coast
From Pennsylvania to Massachusetts, there are dozens of Casinos. Seven more casinos will open by the end of 2018. Experts say opening more casinos doesn’t create more gamblers.
The Casino industry is undergoing a major demographic change too. Millennials and those under 55 are largely un-impressed with old-school slot machines.
States are cannibalizing each other’s gambling business. Atlantic City has been clobbered by casino expansion in Pennsylvania and gaming expansion in Maryland.
A pattern of deterioration has emerged in regards to tax revenue. The more gambling expands, the more likely gains will be eroded due to competition.
- Intense regional competition. Hard-to-please millennials. 35-and-younger demos prefer non-gaming activities.
- Skills-based gaming is being tried In Atlantic City. Jury is still out on that experiment. Early results are tepid at best.