The gaming market seems to have been blanketed by dark clouds for most of the past six years. Last week’s announcement that the boardwalk’s newest resort, the Rebel Casino Resort, was filing for bankruptcy less than a year after opening did not shock anyone.
Bad news was expected.
Game sales in Atlantic City are down more than 40 percent over the past six years. Boardwalk has gone through labor disputes, competition with resorts in neighboring states, casino closures, stagnant investment, and a recession. 에볼루션 바카라사이트
When Hurricane Sandy washed ashore in October and shut down parts of the boardwalk for a week, some analysts quietly wondered if the strange storm was a warning sign from above.
How far is Atlantic City?
Once the centerpiece of Donald Trump’s three wealth Atlantic City empire, Trump Plaza was sold to a California company for $20 million on Valentine’s Day, the cheapest price paid for a boardwalk casino.
How cheap is it?
Trump spent $210 million building a hotel casino in 1984, a record amount at the time.
Rebel’s move to use bankruptcy as a way to erase more than $1 billion in debt after just 10 months of operation was portrayed as a necessary act.
“We believe this is a positive step for Rebel to comprehensively address its financial needs while continuing its normal business operations,” David Lieberk, New Jersey’s head of gaming enforcement, told The Atlantic City Press.
Rebel, which is worth $2.6 billion, has halted construction several times due to financing issues.
The resort was expected to provide a rebirth to Atlantic City’s gaming market by attracting luxury customers from the East Coast and elsewhere willing to showcase the highest room rates on the boardwalk.
Instead, in January, Revel’s gaming revenue was the 11th lowest among the 12 Atlantic City casinos.
Leval couldn’t even attract low-cost slot players.
In 2012, the Atlantic City Casino collected $3.05 billion in gaming revenue, the sixth-lowest annual decline.
But tourism leaders, game officials and New Jersey Gov. Chris Christie are not giving up hope.
Caesars Entertainment owns four Atlantic City casinos – a quarter of the market. Boyd Gaming is a 50% owner and the operator of Vogta, the city’s leading gaming revenue producer. Landry Inc. spent $38 million to acquire Trump Marina in 2011 and rebranded the casino as a Golden Nugget.
Obviously, these companies have not failed.
New Jersey’s internet gaming potential is attracting the attention of new Atlantic City casino owners.
Christie vetoed the Internet gaming bill earlier this month, but said he would sign the new bill as early as this week if there were certain changes, including a 10-year trial period and a higher game tax.
The 12 casinos in Atlantic City are the only institutions that can hold online game licenses.
As such, the Meruello Group of Downey, California, the owner of the Grand Sierra in Reno, has taken over Trump Plaza. Reasonable Group of the Isle of Man, which owns PokersStars.com , is spending $50 million to acquire the Don’t Losing Atlantic Club.
Fitch Ratings game analyst Michael Palladino says legalized online gaming is a positive move for Atlantic City.
Resorts can form a cross-market between casinos and online customers, and convenience can help re-establish New Jersey residents who are currently traveling to New York or Pennsylvania to gamble.
Palladino said the prospects for online gaming keep the unprofitable Atlantic City casino open.
“Without online games, casinos like the Atlantic Club will be closed, eliminating unnecessary capacity in the city to ease competitive pressure,” Paladino said.
Online gaming isn’t why MGM Resorts International is looking to re-enter the market. The casino giant abandoned its relationship with Atlantic City three years ago to settle a dispute with the New Jersey gaming regulator.
A 50% stake in borgata in MGM Resorts went into the trust, and MGM had three years to sell its stake. The sale never took place.
MGM Resorts chairman Jim Muren said he was never satisfied with the agreement, which resulted from the gaming regulator’s improper ruling last week over the Hong Kong businessman Panshiho, a partner of the company in Macau.
Earlier this month, New Jersey granted MGM Resorts permission to re-apply for a game license.
“We raised this issue to address some unsolved questions,” Muren said, “and this is setting the record straight.”
It is not clear what MGM Resorts will do with the license. The company has no plans to shake off the blueprint for the $5 billion MGM Grand Atlantic City, which was announced in 2007 and will be built next to Borgata.