However, the city is facing two big concerns. Will there be enough workers to fill the more than 6,500 open positions needed for construction and operation, and can the city’s soon-to-be nine casinos earn enough revenue to stay viable?
The answer to that second question is one we posed to Dr. David Schwartz, director of the University of Nevada Las Vegas Center for Gaming Research.
Current revenue of seven casinos similar to 2014 numbers
Schwartz used the classic example of a pizza to describe how casinos will split revenue. Imagine a family of seven is sitting at a table upon which there is one rather large pizza. Those seven people will be relatively well fed by that single pizza.
Now, add two more hungry mouths to that scenario. The outcome can go one of two ways: Either everyone will get enough to sustain themselves or one or two people may walk away from the table hungry.
According to statistics that Schwartz compiled, casino revenues are near what they were in 2014 when 13 casinos were competing for their slice of the pizza.
Since 2013, five NJ casinos closed, bringing the total number of operating properties down to eight, one less than the nine that will be in operation after Hard Rock and Ocean Resort (the former Revel AC) open.
In 2014, Atlantic City only lost one casino, the Trump Taj Mahal, a closure that was not a matter of revenue but one of labor.
Cantankerous owner Carl Icahn entered a bitter labor dispute with UNITE HERE Local 54 and had to close the Taj’s doors in October 2016 after revenue slipped because of the work stoppage and the subsequent bad press.
Hard Rock, Ocean Resort will have to fight for their slice
Schwartz said that, since Hard Rock and Ocean Resort are the newcomers, they’ll have to win their battle for revenue through innovation.
“It all depends on how the new properties market themselves and operate and how the existing operators react,” he said.
Schwartz brings up a good point. The 2014 contraction pared away low performers in cutthroat Darwinian fashion, leaving the fittest properties to forge ahead.
Those battle-tested casinos — seven of them, including flagship Borgata and Golden Nugget — are experiencing growth for the most part. Welcoming two new casinos to the mix will most likely trigger the best in these properties, whether it be via announcements for expansions and/or renovations or through other avenues like upgraded member loyalty programs and promotions.[i15-table tableid="11651"]
Unique histories, brand recognition help new NJ casinos
The fight, it seems, will be a spirited one.
The city’s seven casinos are welcoming two new properties that carry with them a sense of excitement and momentum. The Hard Rock Atlantic City has the advantage of its global brand power and the novelty of turning the once-maligned Taj into a once-again vibrant property.
Ocean Resort Casino has a similar angle working for it. The Revel property was a seminal symbol of Atlantic City’s 2014 decline — a massive, futuristic property encased in glass whose $2.4 billion price tag was good enough to keep the property open for two years before it closed its doors.
In the meantime, owner Glenn Straub waged an acerbic siege on the city and state gaming regulators, refusing to get necessary permits and complaining about bureaucracy to the point of likening it to rape.
With the Taj and the Revel now relegated to old newspaper clippings and Wikipedia entries, the city’s two new casinos may very well offer the newness and novelty needed to, as Schwartz pointed out, earn enough revenue to keep their doors open and their coffers full.