As Atlantic City's casinos close, rest of Northeast doubles down on gambling (+video)
Over the past decade, more new casinos have opened in the Northeast than any other region in the country, with at least 27 new venues opening from the mid-Atlantic up through New England.
A full third of Atlantic City’s casino lights are going dark this year, but gambling is showing no signs of disappearing from the East Coast.
This past weekend, the boardwalk lost two major casinos and 5,000 jobs. Even before the latest closings, Atlantic City already led the nation in job losses this past year, according to the U.S. Labor Department.
And on Wednesday morning, hundreds of the newly unemployed began filing for benefits at the city’s convention center, where more than 100 workstations had been set up to handle the long unemployment lines. They will only get longer on September 16, when Atlantic City will shutter a fourth casino – for a loss of an additional 1,200 jobs.
In all, Atlantic City is losing a total of 8,000 jobs as its 12 casinos are cut to eight by the middle of this month.
Further south, the picture is quite different. A gleaming new casino in Baltimore brought better-than-expected crowds this past holiday weekend – its second since a confetti-cannon opening August 26.
The casino, the $442 million Horseshoe Baltimore in the city’s Inner Harbor region, surprised officials by drawing nearly 60,000 visitors over the Labor Day weekend. The Horseshoe is the fifth casino to open in Maryland since 2012, and the state is currently seeing some of the fastest gambling revenue growth in the country. Maryland officials hope it will become a billion-dollar-a-year industry, and the source of thousands of new jobs.
The contrast in these city’s fortunes in many ways reveals a fast-changing gambling landscape in the Northeast – if not the country as a whole, experts say. It’s not that Americans have reconsidered gambling as a pastime. But it appears they are less interested in traveling long distances to a destination to do so.
“A lot of people think Atlantic City got hurt because of the increasing competition – and that’s certainly true,” says Izzy Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton College in Galloway, N.J. “But the bigger story is that it wasn’t about competition, really, it was about a fundamental restructuring of what the business is, from ‘destination’ casinos in places like Nevada and Atlantic City, to more of a ‘convenience’ type of place.”
Over the past decade, more new casinos have opened in the Northeast than any other region in the country, with at least 27 new venues opening throughout the mid-Atlantic states up through New England.
Since 2004, the market has grown about 40 percent. Experts expect the gambling industry in the Northeast to reach a saturation point and hover around $7 billion a year in revenues throughout the region for the foreseeable future, according to a study by Fitch Ratings in New York.
But today, casinos are now going directly to the gambler, rather than expecting the gambler to come to them.
“It’s not just a question of building a better mousetrap, one that’s more attractive or interesting,” says Dr. Posner. “I think it’s more about the mousetraps that are positioned near the mice, so that’s where you’re seeing some growth, especially within cities.”
When gambling was legalized in New Jersey in 1976, the state put no limit on the number of casinos built, requiring only that they be located within Atlantic City and included a hotel with a minimum of 500 rooms.
Today, however, states that have legalized gambling allocate a limited number of casino licenses, and then attempt to strategically place them near populated areas.
And more are being planned. Maryland will open a $925 million casino complex in 2016, and developers are currently vying for New York’s four available licenses for upstate venues.
But even as states like Maryland have had success entering the casino sweepstakes the past two years, states that legalized gambling in the mid-2000s are seeing revenues fall.
In Pennsylvania, which has become one of the biggest gambling states in the nation, slots revenues have fallen two years running, with a drop of more than 4 percent in the past fiscal year. In Delaware, another of the earlier states to embrace casinos, gambling revenues are down nearly 30 percent since 2011 – one reason the state cut over 500 public sector jobs the past five years, according to The Wall Street Journal.
And two New England states are reconsidering the rush to build. Two ballot initiatives in Massachusetts and Rhode Island could turn the tide against what critics say is becoming an oversaturated market in the region.
Voters in Rhode Island will decide this November whether to expand Newport’s small venue into a larger, Monte Carlo-style casino.
And while Massachusetts legislators voted to allow three new casinos and a slots parlor in 2011, a well-organized backlash has placed a referendum on November ballots to repeal the 2011 law.
The parlor is already being built, however, and provisional approval has been set for a complex near Springfield.
It’s unclear how the initiatives will fare at the ballot. A poll earlier this summer showed that 52 percent of Massachusetts voters would keep the state’s casino law in place, with 45 percent saying they would repeal.
“If Massachusetts votes to repeal casinos, this could represent a turning of the tide,” said Richard McGowan, a casino gambling expert who teaches business at Boston College, to The New York Times. “But even if the casinos win, the fact that they’re even having this vote says to the industry that maybe they should think twice about how many casinos they’re opening.”