A recent New Jersey-backed investigation has come to the conclusion that the Atlantic City casino market is oversaturated, thus hindering local operators in their investments in their properties.
A recent study by Rutgers University’s Edward J Bloustein School of Planning and Public Policy was set in place to help determine whether New Jersey should cap the number of casinos operating on the Atlantic City Boardwalk. The study was commissioned by the Governor of New Jersey, Phil Murphy, who is the head of the Atlantic City Working Group.
Even though aggregate gross revenue in Atlantic City rose 22.9% from October 2018 to October 2019 to reach a total of $293.9 million and seven Atlantic City casinos reported a slight increase in revenue, the study showed that most of the improvement came from two casinos: Hard Rock Atlantic City and the Ocean Casino Resort. Each of these properties is coming off a one-year anniversary and the study showed they had not brought in new players but instead taken them from rival casinos.
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According to the report: “The second quarter of 2019 marked a full year of operation for the two new casinos. In that time, Atlantic City’s gaming revenues have grown by about $280 million, roughly the average revenue of one casino in the city over the four quarters ending in the second quarter of 2019.”
The study also showed that new business has stalled and therefore profits are down, making it more difficult for casino operators to invest in their properties to help bring in new players and keep existing customers. It also showed that the issue may worsen over the next year since there will be more competition when the nearby Live! Hotel and Casino Philadelphia opens.
The investigation cited key statistics to show the potential impact the soon-to-launch Live! Hotel and Casino Philadelphia could have on Atlantic City casinos. AC gambling revenues are expected to fall by over 15% to around $283.6 million, with slots tipped to slide 13% to a total of $146,000.
The study said: “Gross gaming revenues in Atlantic City declined by over 50% from their 2006 peak of over $5.2 billion to just over $2.5 billion in 2018 and this effect further diminishes any growth-inducing capacity of new casinos in Atlantic City.”