Atlantic City experiences profit decline - 15% loss in revenue from last year
Atlantic City, known for its gambling scene, is currently witnessing a 15% decline in profits as per November reports from the New Jersey Gaming Enforcement Division. The revenue has been on the rise, but it hasn't been enough to match the earnings from earlier periods. The nine casinos in this city are trying to modernize and attract new visitors with fresh offerings. However, this wasn't enough to maintain or boost their numbers from the year before during the third quarter of 2018.
Past Challenges
Atlantic City fought a downturn in 2014 when gambling was legalized in states like Maryland, New York, Pennsylvania, and Connecticut. This meant that Atlantic City no longer had a monopoly on gambling, and five resorts and connected casinos were closed between 2014 and 2016. Unemployment rates skyrocketed, reaching levels seen in a long time.
Back then, more than 50,000 people were employed in the gaming industry in Atlantic City. A whopping $5.2 billion in revenues was recorded then. Fast-forward to 2016 - a decade after the glory of Atlantic City's casino scene - and the revenue had nearly halved, standing at $2.7 billion. Unemployment rates soared, resulting in a poor economic situation. 38,000 residents were living below the poverty line, making up 37% of the total population back then. Housing and infrastructure development ground to a halt, and the education sector suffered from scarce tax revenues.
Turning the Tide
Atlantic City is attempting to re-emerge after a long winter hibernation. Vegas continues to lead the way with tourist attractions like grand shows, landmark casinos, and a unique location, resulting in an increase in visitors. New Yorker James Plousis, the head of the Gaming Commission, believes that an upturn is imminent. The investments made in the Hard Rock and Ocean Resort Casino triggered business resumption. Marketing experts are hired to target a younger audience, amidst heavy competition.
Although the decline in profits can be attributed to the intense competition, it could also suggest an improvement in the following reports. However, the problem for Atlantic City casinos is apparent: drawing in a new clientele. With all casinos attempting to win over the same audience, a lot of money is put towards marketing. But there are still winners who managed to keep their foothold in the market. The Golden Nugget Casino, for example, has increased its profits by 6.6%.
The Fall of Tropicana Casino
The new casinos are dominating the market, as seen in the Gaming Commission's report. However, there's more to it than just modern competition. Some sites are highlighted because of their novelty. Tropicana Casino is lagging behind with a $30 million loss in 2018 compared to the previous year. Borgata Casino isn't faring much better, suffering a 22% hit and a negative trajectory.
Atlantic City has faced multiple crises in the past. Historians note that it took about 30 years for the city to revive post-depression. In light of the November 2018 report, it appears that Atlantic City is on the upward trend. Although the winnings haven't increased, most other indicators are positive. The city is thriving with more gamblers and tourists visiting. However, the popularity of online gaming and sports betting is threatening Atlantic City's progress, with New Jersey legalizing online casino gaming. This challenge isn't unique to AC; other cities are also facing the same issue. Regardless, history suggests that Atlantic City will find a way out of this crisis. It's already making strides towards change. It's reviving the old with new elements.
Img: #1 New Casino Renovations in Atlantic City
Img: #2 Old Tropicana Casino in Atlantic City: A Struggling Site
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