As the U.S gambling industry starts to evolve due to the introduction of bills aim to regulate other forms of gambling, credit debt watcher Fitch Ratings sounded alarm bells that such progress will come with a hefty price.
Fitch warned that Atlantic City casinos will feel the full brunt of these pending gaming regulations in the near term even though other casinos across the US will also face a changing regulatory landscape
Among the challenges that Atlantic City has to face includes the surge of public’s interest in iGaming and daily fantasy sports, and the casino expansion in North Jersey. New Jersey residents is expected to put to vote on whether to legalize gaming outside the Atlantic City in November.
Should New Jersey residents vote in favor of the construction of new casinos in North Jersey, Fitch pointed out that more Atlantic City casinos will be shuttered.
In June, Fitch identified the Trump Taj Mahal, Resorts and the Golden Nugget as the most vulnerable casinos that will 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 regulatory landscape casinos have contended with, in some cases for many years, is continuing to evolve,” Alex Bumazhny, Senior Director in Fitch, said in his gambling regulatory note, quoted by Business Wire. “Atlantic City is not the only jurisdiction contending with the swift changes.”
Like in New Jersey, Fitch said that Pennsylvania has made progress toward expanded casino gambling. The downside of this expansion, according to Fitch, is that it will exacerbate the recently passed 2% increase on table games tax, which will cost the states’ casinos about $17 million per year.
Fitch warned that casino expansion in Arkansas will affect operations of gambling establishments in Missouri, Louisiana, and Oklahoma.
Meanwhile, Fitch predicted that the Seminole Tribe of Florida will renegotiate a compact with state legislator to allow it to keep its authority to offer table games after both parties reached a stalemate.
Despite the attention online gaming including poker and daily fantasy sports have received, Fitch believes they are unlikely to significantly impact gaming credits in the near future.
Although bills have advanced in New York and Pennsylvania, the most progress has been made in California where PokerStars’ eligibility remains the last hurdle. A state-by-state patchwork approach to fantasy sport regulation ultimately may hinder the sector, as it thrives on a large pool of players.