CASINO

Fitch: Closure of 4 Atlantic City casinos imminent if new ones open up in North NJ

TAGs: Atlantic City, atlantic city casinos, fitch ratings, Leonard Postrado

Credit debt watcher Fitch Ratings warned that at least least four Atlantic City casinos could be forced to shut its operations if new casinos are built in the northern New Jersey.

Fitch:  Closure of 4 Atlantic City casinos imminent if new ones open up in North NJThe warning of Fitch came just a week after Resorts Casino Hotel president Mark Giannantonio made a bleak forecast for casinos in Atlantic City should voters approve the construction of two megaresorts –Projected to rival the casinos in New York – in November.

In its report, Fitch identified the Trump Taj Mahal, Resorts and the Golden Nugget as the most vulnerable casinos that would likely to cease operations if the northern New Jersey casino project pushes through. Bally’s AC, according to Fitch, could also face an uncertain future.

The credit debt watcher noted that Golden Nugget’s operating income before management fees will be wiped out should its gambling revenue drop 25 percent. Fitch also said that Taj Mahal couldn’t afford a 10 percent decline in its revenue or else it would be forced to cease its operations, while a decline of 20 percent would imperil Resorts Casino Hotel.

Should the people of New Jersey vote for the creation of two new casinos, Fitch estimate that it will take four years before the gaming establishments will be fully operational.

“This aggressive timeline assumes one year to pass the necessary regulatory legislation, a one-year bidding process, and a two-year construction phase, but the timeline could be even longer,” the debt watcher said.

Among the leading contenders in the planned North Jersey casinos were Meadowlands Racetrack in East Rutherford, home to the NFL’s New York Jets and Giants, and in Jersey City, where Reebok magnate Paul Fireman proposes a casino resort worth about $5 billion.

“Casinos in Northern New Jersey still face a long and uncertain future before the November referendum to legalize gaming outside of Atlantic City. Public opposition for gaming expansion has been lessening, but is still meaningful at around 50 percent, according to the last Fairleigh Dickinson poll in January 2016. This was down from around 56 percent in June 2015,” Fitch said.

Citing a poll conducted by Monmouth University, Online news website North Jersey reported that New Jersey residents are evenly divided on the issue of constructing two new megaresorts in their state.

The poll found that 48 percent of the resident will likely vote for the creation of the casinos on Novermber 8, while 48 percent will oppose the plan.

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