New York casinos could threaten the existence of smaller operators in Atlantic City

Hard Rock International has yet to apply or announce plans for any of the three competitions New York State Casino Licenses which were officially submitted to the bidding process at the beginning of July this year.

However, at the East Coast Gaming Conference in Atlantic City that began last Wednesday, company president Jim Allen stated that while his company’s Boardwalk property in Atlantic City is one of the most profitable there, he sees the three New York casinos as an existential threat some of the smaller operations.

New York State customers are a major contributor to AC revenue

Upstate New Jersey and Upstate New York account for about a third of all casino revenue in the city. Allen said on Thursday: “There is no question that will have an impact in this particular market.”

Casinos in Las Vegas and almost every outlying establishment in Nevada have one Record earnings posted Since reopening after the pandemic collapsed, with at least 20 months topping pre-pandemic sales levels and setting records month-on-month, New Jersey hasn’t fared nearly as well.

While revenue from the nine operating casinos tops $3 billion, profit is up just 5.6% from profit in March last year. Inflation-related increases in traders’ profits due to inflation are considered the most likely culprits by observers and the traders themselves.

The financially less powerful companies They are Caesars, Golden Nugget, and Resorts with operating profits ranging from $21 million to $60.40 million. It’s too early to tell what will come out Bally’sas it posted a net loss of $1.9 million thanks to extensive renovations to its property.

Mid to high end properties include ocean and Harrah’s, who are in pretty good shape, with earnings just under $100 million each.

MGM Borgata is he King of the world with sales of over $140 million, followed by Hard Rock with a profit of $128 million, followed by Tropicana with nearly $110 million.

Hard Rock has their sights set on a possibility casinos outside of Atlantic City, but that dream was dashed by NJ voters a few years ago. He opened a $500 million hotel in Manhattan last April, but it doesn’t include a casino. Last year, Allen spoke of a $2 billion casino to compete with other top-tier operators in New York, but local media reports earlier this year suggested the Seminole tribe’s business ties with Russia could hamper any offering a casino license in New York. A year ago, just months after the Ukraine war, the company was reportedly looking three potential locations to set up establishments when they have been granted one of the downstate licenses.

Most observers think so two of the three licenses They will go to the state’s existing “casino” operators of video lottery terminals — Resorts World in Queens and MGM’s Empire City Casino in Yonkers — leaving only one of the licenses for serious bidding.

Allan calls for a change in AC perception

Allen explained his opinion on this in detail Business climate in AC considering competition from New York operators: “They have three or four casinos that they are very strong, and then I think the question is what happens on the next level. From a business perspective, there are bound to be vulnerabilities. I don’t think that will change unless the perception of Atlantic City improves.”

Several new non-gaming locations are pending and in progress to increase passerby appeal and brighten AC’s image as more than just a gambling destination. The Showboat is now a hotel with a beachfront water park expected to open soon, but no casino. The old playroom is now a game room with more than 600 closets and an indoor go-kart track. Miniature golf, a 40-foot rock climbing wall, and a skate field are also in the works.

It is planned to use the old abandoned airport, bather field, to become a multipurpose site after a planned investment of nearly $3 billion. However, Atlantic City declined nearly a decade ago and the state took over the city’s finances, leaving only state officials to approve Bader Field’s development.

Spring: Hard Rock Chairman Jim Allen: Atlantic City under threat from New York, April 21, 2023

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