The Facts About Gaming in Atlantic City
Since 1978, casino gaming in Atlantic City has created jobs – both direct and indirect – and has provided unequaled economic stimulus in our region. The gaming industry remains the largest employer in Southern New Jersey. Over the past 38 years, casinos have paid close to $13 billion in taxes and fees (not including property taxes), including $9.7 billion which was deposited into the Casino Revenue Fund. This money is appropriated exclusively for reductions in property taxes, rentals and utilities and for other services that support seniors and disabled citizens.
From 2006 through the end of 2014, over 50,000 new slot machine and table games positions came online in the Mid-Atlantic and Northeast gaming market, causing market shocks and dislocations in Atlantic City, Connecticut and Delaware. Most of these new casinos were located in the heart of Atlantic City’s feeder markets in Pennsylvania (Harrah’s Chester, Sugarhouse, Sands Bethlehem, Mount Airy and Mohegan Sun Pocono), New York (Empire Casino in Yonkers and Resorts World Casino at Aqueduct) and in Maryland (Cordish Live and Horseshoe casinos near Baltimore and Hollywood Casino in Perryville).
The loss of market share from these out-of-state feeder markets has made the North Jersey feeder market even more important to Atlantic City. The proliferation of these out-of-state casinos, along with the economic downturn that occurred in 2008 through 2010, caused Atlantic City’s gaming revenue to decline by over 50%, resulting in the closure of four of its twelve casinos, essentially “right sizing” the industry to the decreased demand for gaming.
The impact of this out-of-state competition has been:
While the Atlantic City casino industry has finally stabilized, adding casinos anywhere in North Jersey will have a significant negative impact on Atlantic City and the South Jersey region. This is due to the fact that North Jersey is now a much more significant Atlantic City feeder market with a high concentration of Atlantic City gamers. Research shows that the gaming market in the Mid-Atlantic region is mature and therefore will not support expansion beyond those out-of-state projects which are currently planned.
What will happen if two new casinos open in our state?
There are several fundamental misconceptions about Atlantic City. Among these are that the casino industry is going out of business. This could not be further from the truth. Since the closure of four casinos in 2014, the casino industry has “right sized” itself. Industry profits in terms of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) more than doubled in 2015 to their highest total since 2009. The eight casinos that remain in Atlantic City have stabilized and are poised for growth. History has shown that the right kind of investment in Atlantic City leads to profitability and a sustainable gaming industry.
In response to the onslaught of additional out-of-state gaming capacity in the northeast, several Atlantic City casinos including, Resorts, Borgata, Harrah’s, Tropicana, the Golden Nugget, Caesars and Bally’s have all invested in strategic improvements such as new restaurants, nightclubs, room refurbishments, convention facilities, concept dining and entertainment, and exterior improvements, resulting in all of these casinos thriving. These casinos continue to operate and are stronger than they have been for years.
The industry is in a position to weather any remaining out-of-state expansion because, aside from one casino in Philadelphia, all of the new gaming facilities coming online in the next few years are in areas well beyond Atlantic City’s key feeder markets.
Without two new casinos in northern New Jersey, the casinos in Atlantic City will continue to invest in their properties, enhance their offerings and leverage the critical mass of eight casinos in one confined area.
Combined with the already existing non-gaming amenities in the City such as the Tanger Outlets, the Playground and other planned entertainment investments Atlantic City will regain its stature as the jewel of the eastern seaboard and one of New Jersey’s finest and most important assets.
The expansion of gaming to northern New Jersey will add to New Jersey’s inventory of broken cities and instead of gaining a jewel and an asset, the state will be left with a broken city and region.
VOTE NO ON NORTH JERSEY CASINOS!