Author: Brian Harris

The shutdown of Atlantic City casinos due to the COVID-19 pandemic has already made an impact on the state.

AC’s nine casinos are forced to rely on just NJ online gambling to bring in any bit of income.

While online play has grown exponentially during the past three months, the casinos have seen an 86% year-over-year total income drop.

And it’s not just the casinos that are feeling the pain from this shutdown.  The state of New Jersey as a whole is taking a hit from the steep loss of tax revenue.

There are plenty of reasons to worry about the future of entertainment and tourism in the state, too.

And the big question boils down to safety.

How can Atlantic City, the state’s tourism hub, stay safe enough so that people want to travel there in the future?

NJ Assembly panel discusses tourism and COVID-19

To that end, a panel discussion was held in Trenton on June 25 where all of those concerns were addressed.

Casino representatives, along with people from the summer rental, live entertainment and tourism industries, met to discuss the impact that the coronavirus pandemic has had so far and how they can keep visitors safe.

Assemblyman Ralph Caputo, chair of the state Assembly’s Tourism, Gaming and the Arts Committee, shared the concerns that were raised during the meeting in a statement that said in part:

“Tourism and hospitality are vital industries in New Jersey, bringing in over 100 million visitors every year, producing (billions) of dollars in revenue and providing nearly 10 percent of the jobs throughout our state.”

Luckily for Atlantic City, Gov. Phil Murphy announced that casinos can reopen at 25% capacity on July 2. All patrons will have to wear a mask, and screenings will be done as well.

This news was followed on Monday by the governor canceling plans to reopen indoor dining on July 2.

Caputo went on to say that “Gaming and the arts have made significant contributions to our state’s culture and economy.” The state has a wide range of beaches, casinos, cuisine and more, but “all of these have been greatly impacted by COVID-19.”

‘Successful steps’ to keep casinos safe

New Jersey has been one of the more cautious states in regard to reopening places due to the pandemic.

State officials are not messing around about maintaining the downward trend of cases, even going as far as suing a city to prevent it from having indoor dining before it was approved.

Murphy shared some of those concerns during a radio station appearance.

“We’re spending a lot of time with the owners and operators as well as the workers and their representatives on casinos,” said Murphy to WOND’s ACMike Lopez.

“The bad news is casinos sort of have the attributes that are hardest to deal with this virus. It’s indoors, no ventilation. You’re sedentary, you’re in close proximity. Having said that, they’re big footprints, and we think there are successful steps that can be taken to address the challenges.”

State officials also saw what happened when Las Vegas opened up at the start of June without a mask order in place.

There was a sharp uptick in new COVID-19 cases. A required mask order went into effect last week.

AC casinos put safety plans in place

Some of Atlantic City’s casinos have already come forward with plans to ensure safety and cleanliness for visitors.

For example, Hard Rock Casino plans to use thermal cameras to check guests’ temperature. The casino also will space out slot machines and install plexiglass barriers for table games. All AC casinos plan to implement similar procedures.

When Hard Rock reopens on July 2, it will also have a new protocol called the Safe + Sound Clean Team. The team consists of 100 employees whose sole job is to deep clean all gaming surfaces, chips, hotel rooms, restaurants, pools and public areas.

Casinos will also be providing hand sanitizer stations on the casino floor along with enforcing the state’s mandates regarding masks and social distancing.

But these plans are all dependent on what guidelines the state and Division of Gaming Enforcement require of casinos, too. Those have yet to be made public.

Cashless gambling in Atlantic City?

Another, more innovative tactic that Atlantic City’s casinos could possibly employ is cashless gaming.

Just approved by the Nevada Gaming Commission this past week, cashless gaming would not only be a great way to help prevent COVID-19 spread but also would give players more options.

The new regulations approved by Nevada would allow players to withdraw or deposit money from table games and/or slot machines with a digital wallet such as PayPal, Venmo or Apple Pay.

This new method of “money handling” would drastically cut back on the use of chips by players, casino cashiers and dealers alike.

Implementing cashless gambling, however, is only one part of any plan to make Atlantic City safe for tourists. Safety plans and protocols, as well as following state guidelines, are essential to AC’s gambling future.

The fact remains, though, that the flow of tax revenue into the state’s coffers shrank while casinos were closed. Failing to bring Atlantic City back safely will deter visitors.

And if the pandemic worsens in NJ, casinos will likely shut down once more.

The casinos of Atlantic City are now into their third month of being closed due to the COVID-19 pandemic.

And the fiscal impact of being shut down is starting to rear its ugly head.

According to the last three monthly comparisons released by the Division of Gaming Enforcement, the nine Atlantic City casinos have made a combined $85.5 million in land-based revenue.

To put that into context, Borgata, the top-performing AC casino, posted $59.4 million in revenue in March 2019.

The loss of revenue has not only had an effect on the casinos but also on Atlantic City and the state as a whole.

The end result of such a prolonged casino closure is a decreased amount in taxes collected from casino revenues. Those taxes help fund various local and state projects.

Revenue, taxes at a standstill with AC casinos closed

To be fair, 2020 started off on a high note for casinos. Atlantic City casino revenue was enjoying a 21-month win streak.

So, it is no surprise that with no in-person bets and lights out, revenue for the state’s nine casinos has deteriorated.

In March through May of last year, casino win totaled $653.7 million.

In comparison, the casinos were open for just 16 days in March before temporarily closing. The result is that for March-May 2020, revenue had an 86% year-over-year drop.

Meanwhile, during March through May of last year, the state pulled in $47.9 million in taxes from casino revenue. (That number includes retail sports betting but excludes internet gaming tax, which did not shut down.)

During the same time period in 2020, the state collected only S6.1 million.

The drop almost certainly leaves a budget gap in New Jersey.

NJ online casinos pick up the pace

The one saving grace for the closed casinos in NJ during these trying times has been the growing number of people gambling online.

In the last three months, NJ online casinos earned $230.3 million, more than double the same time last year.

As a whole, that industry has yet to see a month-over-month decline in any year since its launch.

Posting three record-setting months in a row may not be the new normal. But it certainly helps when Atlantic City casinos are shut down.

A push to reopen Atlantic City casinos

Despite the major uptick in online gaming revenue, the growing losses at land-based casinos are a concern to the state’s top officials.

New Jersey State Senate President Steve Sweeney sent out a tweet on June 13, calling for Gov. Phil Murphy to open up the casinos:

It is past time for New Jersey to reopen #casinos. We can’t continue to keep them closed, the region needs them open and the people have asked for them to open. They can return with safety and common sense, we are seeing other industries do just this Statewide.

— Steve Sweeney (@NJSenatePres) June 13, 2020

Taking a more cautious approach is Murphy, who is looking for a July Fourth opening for the casinos, something echoed by Atlantic City’s mayor, Marty Small Sr. 

To help stem the growing losses being suffered by the casinos, the state Senate passed an emergency relief bill on June 15.

The legislation gives the casinos interest-free loans along with temporary liftings of various taxes for the remainder of the year.

Bailout the casinos?

Concerns have been raised by state lawmakers over cutbacks to other programs Atlantic City needs in order to give the casinos a bailout.

But state senator Chris Brown, who co-authored the bill with Sweeney, feels differently. He considers this piece of legislation a necessary one to protect one of the state’s biggest attractions and revenue earners.

“My concern has been and remains with the families who overnight found themselves unemployed and left to deal with a broken unemployment system for the last three months,” Brown said.

“Working in a bipartisan manner, we took a step today toward saving 27,000 casino jobs while also assisting our small businesses so we can put our Atlantic County families back to work.”

What state officials, casino employees, and all those impacted by the shutdown can agree upon is that the sooner the casinos reopen the better.

A summer without the casinos would be a disastrous turn of events for the town and the state as a whole.