Revenue has increased for 17 consecutive months, October boosted by online gaming and sports betting

Adding more casinos will hurt Atlantic City market, report says

Total gaming revenue for Atlantic City casinos increased 13.6% last month year-over-yer, driven by strong gains from online gaming (+69%) and sports betting (+170.7%).
2019-11-15
Reading time 2:21 min
A Rutgers University report presented Thursday to a New Jersey state Assembly panel predicted a casino due to open next year in Philadelphia’s stadium district could divert $63 million to $150 million in gambling revenue currently being spent in Atlantic City casinos. Jim Johnson, former special counsel to Gov. Phil Murphy, suggested a cap on the number of casino licenses.

A Rutgers University report presented Thursday to a New Jersey state Assembly panel showed that the northeast U.S. casino market is saturated and that new casinos will hurt Atlantic City, which currently has nine of them.

Jim Johnson, former special counsel to Gov. Phil Murphy for the Atlantic City transition, has suggested a cap on the number of casino licenses. He reiterated that suggestion Thursday before the Assembly Tourism, Gaming and the Arts Committee, calling the ongoing health of the existing casinos “a very serious concern.” At the panel, he was joined by Lt. Gov. Sheila Oliver and Atlantic City Mayor Marty Small; Catherine Brennan, deputy treasurer of the state Department of the Treasury; and William Irving of Rutgers University’s Economic Advisory Service. 

“The trendlines suggest things are going to be down,” as new casinos continue to open in neighboring states, Johnson said, as reported by the Associated Press. “The Atlantic City casino industry is vulnerable to challenges from within, and competition from outside the state. The data is really stark.”

The Rutgers report predicted a casino due to open next year in Philadelphia’s stadium district with 2,000 slot machines could divert $63 million to $150 million in gambling revenue currently being spent in Atlantic City casinos.

The idea received support from several lawmakers. Democratic Assemblyman Ralph Caputo rejected a proposal to restore casino operations to the Showboat, which currently operates as a non-gambling hotel.

“That’s just a bad idea,” said Caputo, who is a former Atlantic City casino executive. He said AC’s overall gambling revenue has increased in the 15 months since two new casinos opened last year: Hard Rock, the former Trump Taj Mahal, and Ocean Casino Resort, the former Revel. But the gross operating profit of the casinos has declined since the two new entrants joined the market.

 

Democratic Assemblyman Ralph Caputo.

Republican Assemblyman Ronald Dancer also said a cap on casino license should be studied. “There are only so many gambling dollars to go around,” he said. “This certainly needs to be part of the discussion.”

According to figures released Thursday by the state Division of Gaming Enforcement, total gaming revenue for Atlantic City casinos increased 13.6% last month compared to the same period in 2018. Strong gains from online gaming (+69%) and sports betting (+170.7%) pushed total revenue to $266.23 million in October.

Year to date, Atlantic City casinos have reported $2.73 billion in total gaming revenue, putting the $3 billion annual benchmark within reach. The last time the industry eclipsed $3 billion in gaming revenue was 2012, when there were 12 casinos in Atlantic City and online gaming and sports betting had not yet been introduced.

Total gaming revenue in Atlantic City has increased for 17 consecutive months, dating to June 2018, when Hard Rock Hotel & Casino Atlantic City and Ocean Casino Resort both opened.

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