"Atlantic City is not a nine-casino market"

During an interview on Saturday, Tilman Fertitta, owner of Golden Nugget Atlantic City delivered an assessment on the current situation of the casino market in the state.

“It’s not a nine-casino market, and I don’t understand why nobody realizes that,” Fertitta said.

The 62-year-old owner of Fertitta Entertainment, which operates Landry’s Inc., Golden Nugget casinos and the NBA’s Houston Rockets, said the 2018 addition of Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort “affected everyone.”

“You could say the market is going up and that we’ve added thousands of jobs, but now every other casino has had to lay off jobs, so I don’t even know how big the net gain is,” he said. “But now, none of the casinos have the cash flow that they did.”

Fertitta said what he sees now mirrors the situation from earlier in the decade when casinos stopped investing in their properties because of declining profits brought on by increased competition, the Press of Atlantic City reports.

Ultimately, five Atlantic City casinos closed within a two-year time frame, shrinking the market to seven operational gambling parlors by the end of 2016.

“This is what happened to Atlantic City the first time, and it’s how the casinos got all run down. People didn’t have the money to keep (their properties) new and fresh by putting money back into it,” Fertitta said. “I think it’s a huge mistake again. It’s a seven-casino market, and when it was seven casinos, everybody was putting money back into the properties. Now, they won’t.”

Jim Johnson, special counsel to Gov. Phil Murphy and co-author of the state’s transition report on Atlantic City, recommended exploring the notion of either capping the number of casinos or limiting the total market capacity.

Any financial struggles Fertitta’s Golden Nugget has experienced in recent months have been offset by significant gains in online gaming revenue. In July and August, Golden Nugget reported the market’s second-highest total gaming revenue (behind only Borgata Hotel Casino & Spa), spurred by a 63% growth year over year from internet gambling.

Through August, Golden Nugget and its online partners have reported $108.5 million in revenue from online gaming, according to the state Division of Gaming Enforcement.

Recently, Fertitta and Golden Nugget got another boost from a bill signed by Gov. Phil Murphy that allows the casino to offer wagers on NBA games. When New Jersey initially passed its sports betting bill in 2018, the legislation prohibited owners of teams from offering action on league play where their clubs participate.

Fertitta, who is the sole owner of the Houston Rockets, said the prohibition put Golden Nugget and its online sports betting partners at a competitive disadvantage.

“It will be huge for us,” he said of Golden Nugget’s ability to offer NBA games, excluding those the Rockets play in, this upcoming NBA season. “I think we’ll do well and will be a leader just like we are in internet gaming.”