Gaming analysts at this week's Pennsylvania Gaming Congress agreed that at some point next year, Pennsylvania will likely overtake Atlantic City in casino revenue. That revelation is not a surprise, but is certainly a concern for New Jersey.
Atlantic City's peak came in 2006 when its casinos reported gaming revenue of just over $5 billion. That was also the year that Pennsylvania allowed slot machines, and the combined one-two punch of a neighbor with slots and a downturn in the economy have been devastating to Atlantic City.
With 30 consecutive months of falling numbers, Atlantic City managed just $3.6 billion revenues from its 11 casinos. In contrast, Pennsylvania took in $2.5 billion from its 10 casinos, none of which have hotels. In July of last year, the casinos in Pennsylvania introduced table games such as baccarat, blackjack, craps, and poker. What can Atlantic City do to compete?
If it can compete, the opening of Atlantic City's newest mega-resort at a cost of $2.4 billion will help, but it is ironic that the cost to build the Las Vegas style property is nearly two-thirds what the other casinos brought in for all of 2010!
And, as usual, the conference brought out the typical bickering about Atlantic City's safety and the inability for even well-educated people to understand the public's mind-set.
When gaming analyst Adam Steinberg noted that improvement in Atlantic City's revenues could rely on changing the town's reputation as a crime- ridden area, Israel Posner, director of the Richard Stockton College's Institute of Gaming replied, "I don't think there is any evidence of that at all. The bottom line is, he is talking about perception, not about the facts."
That's all well and good, may be completely true, but the director is missing the point. He can argue 'till he is blue in the face that the perception of Atlantic City as an unsafe area is not supported by crime statistics, but that doesn't change what people think. Perception is reality - especially to a casino enthusiast. That's kind of an important point for an institute of gaming to keep in mind. I wonder if the college has marketing classes?
Comments
It’s not about crime. It’s about gas prices and the fact that AC casinos have tightened up on comps for the basic, recreational player. If I’m not getting a free room why would I go to AC when PA is right in my backyard? If my free play offers have disappeared what is my incentive to make the trip?
Ceasars/Harrahs have tightened up – which might look good on their bottom lines in the short run but will continue to hurt in the long run. Not being appreciated leaves bad taste in your mouth and will be remembered long after the AC casinos wisen up.
I used to like to go to AC. I don’t normally smoke, but I like to smoke when I am gambling. So now all the smoking areas are very crowded and the non-smoking areas are practically empty. On top of that people in AC are not particularly customer friendly. If you do get a comp room, it could be a very bad room and even the nice rooms are not very clean. The food seems overpriced and mediocre. I used to like going there, but now I go to Dover and smoke outside or Charles Town where most of the Casino is still smoking. If it was not for the non-smoking rules I would probably still go to AC.
PA has a larger population than NJ, so it is understandable that they would surpass them in total revenue with about the same number of casinos. However, I don’t see this holding true in the long-term. PA has imposed an outrageous tax rate (55%) on casinos vs. 10% in NJ. This leaves very little room for profit and forces the owners to set low payback rates. Once the players understand this and NJ gets it’s act together, the momentum should shift back to NJ.