Three days doesn’t make a lifetime.
The Division of Gaming Enforcement’s June revenue numbers indicate that both casinos got off to a great start. When extrapolated out over a 30-day period, the two casinos would bring in more than $30 million a month.
Pandit: Great opening-weekend numbers are temporary
Lest one get too aggressive with predictions, though, it was a historic opening weekend in Atlantic City, the enthusiasm of which led to millions of dollars of revenue over the course of three days.
Rummy Pandit, executive director of the Lloyd D. Levinson Institute for Gaming, Hospitality and Tourism at Stockton University, spoke with NJGS about what he thinks will happen to those revenue numbers over the next few months.
Pandit told us gamblers will flock to a new casino because of the novelty — they want to see the new casino floor, the entertainment, and the hoopla that accompanies an opening.
However, over time, they’ll make a decision to return to their favorite casino or they’ll pledge their allegiance to Hard Rock or ORC.
“Over time, it starts to settle down because people tend to settle into their preferences into which properties they want to be frequent and continue to be loyal to,” Pandit said. “At some point, they may like their other property better or they may like the new one.”
Predict the casinos’ futures with a grain of salt
During that time, it’s almost impossible to gauge the long-term effect that Hard Rock and ORC will have on the Atlantic City casino industry, said Bob Ambrose, a gaming consultant and adjunct professor of casino management at Farleigh Dickinson University.
Ambrose when on to note that people tend to be quick to draw long-term conclusions about a casino’s opening performance.
“There has always been a ‘rush to judgement’ when it comes to anything concerning an Atlantic City stakeholder or their new business model,” he told NJGS.
Regardless of how the revenue and successes play out in the future, this summer is a big opportunity for all the city’s casinos.
“Right now, it is the middle of the summer tourist season and everything is up for grabs,” Ambrose said. “It is an exciting time in A.C.”
Hard Rock, ORC catering to different clients
Pandit pointed out that what makes the Hard Rock and ORC properties so unique is that there’s a good chance they’ll draw patrons because of their brand association.
Hard Rock is an international icon with a devoted fan base, while ORC is a Category 3 hotel in the World of Hyatt loyalty program whose rewards nights cost what Hyatt rewards members would consider an affordable 12,000 loyalty points.
Because of this, Pandit said, he doesn’t see Hard Rock or ORC causing as much disruption in the market as one might expect.
“At this point, it looks like both properties will bring in specific segments that haven’t been here before and, thus, collaboratively grow the market,” he said.
Growing the market is good news for the city’s seven other casinos. Not lost on the industry is the disastrous 2014 casino contraction, in which the market was not able to sustain 12 casinos. Five closed.
A bigger market means less competition for the existing customer base.
Hard Rock, ORC already winning
Measuring the success of these two casinos could be a purely revenue-based call for some. If the casinos consistently finish in the top-three for revenue, they’re a solid success.
However, Pandit warned against a simplistic view of casino success. Rather, he said, look at how a casino or casinos expand the market as well as other “wins” that may not immediately come to mind.
“These two properties were hoping to grow the market, which would be a sign of success,” Pandit said. “The other sign is that combined, these two properties have hired more than 7,000 employees that’s a huge success for the area.”
These new resort experiences should lead to healthy competition
Ambrose said another way to measure the two properties’ success is by the individuality they bring to the market and how that will add to a healthy competition among casinos.
Hard Rock International owns no other properties in the city, nor does ORC, which is a far cry from 2014 when two groups owned more than half the properties in town.
“Atlantic City has long needed this type of competitive resort environment because everyone will actively be in the game competing for business,” Ambrose said. “For too long there was not enough individual ownership of casino properties. As an example, it used to be that the Trump brand had three and Caesars had four. Where was the competition with only twelve properties in town?”