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Friday, June 27, 2014

Meanwhile as Atlantic City Melts

The dog days of summer have not even hit, yet Atlantic City continues to melt.  Last week Revel Casino, the casino which was going to change the fortunes of Atlantic City, filed for bankruptcy for the second time in two years and an auction of their property is tentatively scheduled for August 6.  Today, the Showboat is expected to announce its closing despite the fact it does show a profit; a victim of too many casinos in Atlantic City.  Caesers, which owns the Showboat and three other casinos, wants to close Showboat to reduce its exposure in Atlantic City, and let's not kid ourselves, if they can get those customers to visit one of their three other properties, will  help improve their bottom lines.  This follows the closing earlier this year of The Atlantic Club which was jointly purchased by two other casino companies and closed.

On-lime gaming, the last savior of Atlantic City has been disappointing, to the point the revenue to NJ tax coffers is missing its (re-revised) target, meaning the state has a larger deficit it must close and less revenue for the next state budget. This assumes the federal government doesn't make it illegal.

Sports betting, the latest promised savior?  Don't count on it.  The state's plan to thread their way towards offering sports gambling likely will be declared illegal, but even if it passes muster, do you seriously think it is going to be a draw for Atlantic City?  If the state does manage to get a law through the legal roadblocks, how soon do you think it will be before other states pass similar laws and introduce their own form of sports wagering?

To be fair, there was too much capacity in Atlantic City so some casinos were bound to be close and others will follow suit in due time.  This will make the surviving casinos profitable but not back to the levels they once were.  It will no longer be the employment engine it once was.

Hence the argument, too many jobs would be at risk if casino gaming came to New Jersey racetracks would become a moot point.  Atlantic City will be right-sized

The time has come to allow slot machines at racetracks in New Jersey.  Not just, the Meadowlands, but Freehold and Monmouth.  It is clear the five year window Christie implemented will result in failure for Atlantic City.  Why not work now towards allowing slot machines at racetracks in 2016?  Pass the necessary referendum, pass the rules, allow the tracks to get their financing so they may begin construction so come the end of the five year window of exlusitivity, racinos will be able to open on January 1, 2016.  It is called responsible planning for the future.

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