Developer warns politicians of casino oversaturation

"They think you can have casinos like Starbucks. If that attitude continues, it's going to implode on them,” added Cordish. The expansion of casino gambling has continued rapidly over the last several years, nowhere more fiercely than in the Northeast. There is serious disagreement within the industry as to whether the market is oversaturated or whether there is room for further growth. But most agree it is tougher to do business in the Northeast casino market than it ever has been before.

The Cordish Company's Maryland Live!, opening on June 6, will have 4,750 slot machines and cost us$ 500 million. "Thanks, David, for bringing 4,700 new slots to this market," joked Don Marrandino, eastern division president of Caesars Entertainment, which owns casinos in Atlantic City and Pennsylvania. "That's great news for us."

Cordish said the casino market needs the stability of knowing how many operators there are going to be, particularly with the 67 percent tax Maryland imposes on its casinos. He said the state will have four casinos with more slot machines "than anything in Las Vegas. It's an experiment that nobody knows how it's going to turn out. A contest I don't want to win is Maryland will probably be the king of the oversaturated market with the highest tax rate. It's a real problem.

"What happens when you put mega-casinos close together is they generally not only oversaturate the market, they don't work," Cordish said. In the Washington D.C. region soon, he added, "you'll have four of the largest casinos in the country operating within a short drive of one another."
But new casinos keep coming. Timothy Wilmott, president of Penn National Gaming, which has 26 casinos nationwide, said the company is interested in new markets in Massachusetts and Texas, and is opening new casinos in Ohio soon.

At the East Coast Gaming Congress, held at the newly opened Revel casino, executives from Atlantic City casinos said offering non-gambling amenities is key to surviving the cutthroat market, particularly in the northeast.

Tony Rodio, CEO of Tropicana Entertainment, said the industry, and especially Atlantic City, needs to play up the other offerings that don't involve gambling. He said the Tropicana in Atlantic City is fiercely going after mid-week meeting and convention business. Marrandino cited the new us$ 20 million "Do AC!" advertising campaign that Atlantic City recently launched, noting it deliberately did not show any gambling activities. That was to stress all the other things there are to do in the resort, he said.

Scott Butera is president of the Mashantucket Pequot Gaming Enterprise, which owns the Foxwoods Resort Casino in Connecticut, which also has been hurt by expanded competition in the northeast. "There's a feeling you just want to click your ruby slippers together and say, 'There's no place like home,' and things will go back to the way they were," Butera said. "That's never going to happen."