Atlantic City will face more casino closures thanks to increased competition from new casinos in the US northeast, according to a new report.
On Monday, Moody’s Investors Service released a report noting that there were eight new casinos set to open over the next three years in Maryland, Massachusetts, New York and Pennsylvania. Moody’s believes the regional market is already saturated and further competition will hurt all existing casinos, but AC is expected to bear the brunt of it.
Moody’s notes that AC’s eight surviving casinos have fared much better since four of their competitors shut their doors in 2014. But the new casinos in neighboring states will heap more pressure on AC’s fragile recovery and Moody’s suggested the Trump Taj Mahal, Caesars and Bally’s venues are the most likely candidates for closure.
Moody’s didn’t see only losers from all this expansion, noting that gaming device makers like International Game Technology, Scientific Games and Aristocrat Technologies are licking their lips at the thought of orders for 20k new slot machines to fill these eight new gaming venues. So what if no one actually ends up using them? Sell, sell, sell!
Meanwhile, AC is attempting to fend off the threat of even more competition in its own backyard. New Jersey Democrats are reportedly rushing to approve language for a ballot referendum on amending the state Constitution to permit casinos to be built outside of AC, most likely in the northern part of the state, close to the New York border.
In July, state lawmakers abandoned plans to approve a ballot referendum for November 2015, claiming there wasn’t enough time to drum up sufficient support in the legislature. On Monday, lawmakers told Bloomberg Business that they were now hoping to get the question on the Nov. 2016 ballot.
Lawmakers who favor allowing up to three casinos outside AC claim that the plan is intended to help both the struggling seaside gaming hub and the state’s horseracing industry, as a portion of the revenue from the new casinos would be shared with these industries. The legislators also argue that opposition to their plan is misguided, as gamblers who might visit a casino attached to the Meadowlands Racetrack in East Rutherford weren’t going to make the trip south to AC, anyway.
The state legislature only has a couple weeks left before it adjourns for the holidays, but pro-expansion legislators’ hopes are high that enough support can be mustered for initial approval of their plan, with a final legislative vote next August before presenting the question to voters in November.
