A few bad beats won’t stop Atlantic City.
On May 26, 1978, the city welcomed gamblers to the front doors of Resorts International, the first AC casino which still stands today. Now, 40 years later, the city is awaiting the opening of two casinos and, in a larger sense, an aggressive rebirth after a harrowing few years.
A New York Times article from that day in May seems almost prophetic in the way reporter Frank Ferretti described it:
“After a succession of fits and starts, gambling has finally arrived in Atlantic City and, even as this old resort town wonders whether its new games will become the cornerstone of an economic resurgence, the city has spruced up for its first betting weekend,” he wrote.
Two new casinos punctuate year 40
On June 28, Hard Rock Atlantic City and Ocean Resort Casino will open up. One can’t help but imagine how the hype of this year’s dual opening will compare to the day that Resorts became the first operating casino in New Jersey history.
In many ways, the two days are linked. Both represent the birth of an industry — a true birth in 1978 and a rebirth in 2018.
An article from Associated Press notes the financial decay that eventually led to a morbid closure of four casinos in 2014 most likely started in 2006 when Pennsylvania kicked off its casino industry.
Rebounding from a historic low
By the time the Great Recession rolled around, AC was already hurting. It survived the downturn but left it crippled. The Revel Casino, the city’s newest gambling property, closed its doors after barely two years in operation.
Then, in 2016, the Trump Taj Mahal closed its doors after a bitter labor dispute hampered the property’s profitability.
At that point, there was a certain sense of failure — five casinos closed within two years, the city was $500 million in debt, and the state was preparing to come in and take over Atlantic City’s finances.
In less than two years, the despair lifted. The state reset the broken financial bones, proactive development groups bought the Trump Taj Mahal and the Revel, and New Jersey won its sports betting appeal to the Supreme Court of the United States.
NJ sports betting to boost Atlantic City revenue…
On May 14, just two weeks before Atlantic City’s 40th anniversary, SCOTUS ruled in favor of New Jersey and repealed the Professional and Amateur Sports Protection Act (PASPA).
The decision made it possible for states to vote on their own sports betting law. New Jersey was widely regarded as the favorite for being the first state to launch full sports betting outside of Nevada.
Delaware beat NJ to the punch, taking the first post-PASPA individual bets on games this past week. However, it’s important to point out they pushed for legalized sports betting about a decade ago and bought all the equipment needed to run sports betting operations at racetracks.
… But when? And how much?
After a short delay that had some NJ lawmakers worried, Gov. Phil Murphy signed the NJ sports betting bill into law on Monday. Casinos and racetracks in the state can begin taking bets within days of the law taking effect.
This is good news as AC could lose revenue as Delaware welcomes more sports bets. However, the bigger issue might be Pennsylvania. While the Keystone State won’t be launching sports betting before NJ, its launch will most certainly cut into Atlantic City’s sports betting revenue.
Two more casinos may temper overall growth
As Atlantic City waits for NJ sports betting to go live and prepares to open two more casinos, questions about profitability have emerged. Will these two new properties create exponential revenue growth or will they cut into the profits of the city’s smaller properties?
Will there be too many casinos in Atlantic City again, sparking another casino contraction?
In the past, experts who’ve spoken with NJGS have indicated that the outcome is unknown: There could be enough pie for everyone to get a slice, or there are one or two casinos who could go hungry.