Atlantic City in a seven year decline in profits

At one time Atlantic City was the place to be on the east coast offering everything vacationers could dream of including the big name casinos to play in. Internationally since the beginning is has been a renowned resort city where people would go to gamble, companies would have conventions there and everyone would go there to relax and have a good time with all that it had to offer. It was during the 20th century that the area went through its boom years. It was actually in the 1920’s when tourism was at its peak and some even today say that it was in the 20’s when Atlantic City was enjoying it’s golden years. Then in 1976 the people of New Jersey voted to approve casino gambling there and the first legal online casino in the eastern US which opened its doors on May 26th, 1978. It wasn’t too far after that, that the infamous Atlantic City Boardwalk opened and business was good. But no matter how hard they tried, they could not achieve the success of Las Vegas as a major entertainment and gaming destination, especially after the redevelopment of Vegas in the 1990’s. Two new casinos in Connecticut didn’t help either and it wasn’t to far after that when the cities tourism started to decline. Since then it has managed to hang on with limited fanfare but it has been in the last seven years that has seen the biggest drop. In 2012, casino profits have dropped 27 percent; meanwhile there has been a slight uptick in revenue from non-gambling businesses. Now ever since Hurricane Sandy in October 2012, the overall infrastructure was damaged while casinos had to close for a week entirely to repair themselves from the hurricane. With all these financial issues coming from all directions, it’s obvious to see why Governor Chris Christie has recently legalized online casino and wants New Jersey to become the “Silicon Valley” of the US gaming industry. It may be just in time as at least three casinos on the New Jersey boardwalk are close to bankruptcy and the Revel casino has formally entered Chapter 11 just this March. Other casinos like the Atlantic Club are having major financial issues and will be lucky if the online poker room PokerStars will come to the rescue and be allowed to buy it. This will also place PokerStars in a good position once approved by the New Jersey regulatory council. But they better work fast in bringing Atlantic City back to its glory days, as now Pennsylvania has now passed them as the second place spot next to the front-runner Vegas. It’s a hard pill to swallow but New Jersey has now realized that its casinos are simply not the tourist luring attraction they once were. Again, now they realized they need to bring in online gaming to keep the revenue coming in and it was a good decision.

You could say that they took a chapter out of the same book that the small island of Antigua wrote. Back in the early 1990’s the little Caribbean island went through some horrific hurricanes that devastated the country and the tourism industry where all the revenues came from. It wasn’t too long after that in the mid 1990’s that when they became one of the first online gaming jurisdictions in the world attracting entrepreneurs who wanted to set up online gaming companies. It started with the first online Sportsbooks and then on to casinos. Atlantic City has to now realize that even the big name land based casinos won’t save them like Trump Taj Mahal Casino and the others. They alone cannot stop the seven-year decline. If people have an option they sound like they will go to Pennsylvanian casinos as they may still see them as the new kid on the block with fresh new casinos to try. People will still come to Atlantic City but its time in the land based casino world of high profitability that just may have come and gone. Atlantic City will always be a tourist destination but it will be up to the casinos to start using their online presence to upsell and cross promote between the online and land-based properties. By making their mark in the sand and legalizing online gaming, it will now have limited state competition in this space and might even make some compacts between other states like Nevada to keep growing that side of their business.

If they become the “Silicon Valley” of online gaming, well then the sky really is the limit and they’ve shown that they can adapt to a changing marketplace which has now moved to one of convenience and not just entertainment. Just then they might be embarking on a seven-year increase in profits.