The Meadowlands development projects the inclusion of a casino and racino but will this be the straw that finally breaks Atlantic City’s back?
With the state Gaming Enforcement Division in New Jersey giving final approval for the shut down of the Revel in Atlantic City, one could be forgiven for thinking that the shrinkage in the number of casinos in the coastal gambling mecca is a painfully slow car crash. The year started out with the closing of the Atlantic Club, is due the shutting of doors at the Revel and the Showboat over the labor day weekend, and the Trump Plaza is due to flip its wig and walking away sometime in September as their folliclely challenged boss moves his casino interests to Vegas.
Atlantic City vs. Meadowlands
• Gaming tax revenues down 8.2% in NJ
• New Yorkers soon to be winning at blackjack?
• Interstate competition fierce
This will still leave Atlantic City with 8 casinos but the sudden nature of this adjustment in scale has left the community reeling from a stream of bad gambling news that Senator Jim Whelan has already gone on record as calling “a disaster”. The closing of a full third of the providers of poker and blackjack signals extremely tricky times ahead for what is traditionally seen as a regional not international attraction, and puts it at stark contrast with Vegas where a mini-recovery is seeing more casinos open, not close.
The timing of these closures couldn’t be worse, coming, as they do, at the end of the summer season and adding some 8,000 extra jobless to the seasonally adjusted nature of unemployment in the city which is now having to scramble to find a way to stabilize and recover from this serious blow to the local economy. Of course whilst the end results have arrived all at once, the causes have been stretched out over years with total casino revenues within the municipality falling some 45% over the last eight years.
This decline in fortunes has been mostly due to the ongoing hard economic times following the troughs of the recession, competition from surrounding states, who have been quick to snatch at the taxes and levies to be gained from casino licensing, and, of course, the allure of Vegas which is doing far more to attract visitors now than ever before. Atlantic City was once an oasis of gambling in an otherwise parched region, but that’s changed, and if the Meadowlands Regional Chamber get their way, it’s going to change even more.
Meadowlands Vs Atlantic City
Despite Atlantic City’s ongoing woes there are plans afoot for the huge entertainment complex that was once the Meadowlands Xanadu in Northern New Jersey, plans that could see it arise as the next thorn in the Broadwalk’s side. Currently standing empty, this mammoth site is, say the MRC, to be redeveloped as a mall, and they want to add a casino next door, and a racino at the Meadowlands Racetrack, which would, of course, put it in direct competition with Atlantic City.
Of course they’re not able to just go ahead with the project as a whole as it would require a state constitutional amendment to permit gambling beyond the Atlantic City limits. The lobbying for this legislative process, and indeed against it, spirals around with various politicians setting out arguments for and against this perhaps counter-intuitive addition of casinos in a state whose commercial casino tax revenues fell by some 8.2% from 2011 to 2012, and which faces competition from New York, Maryland and Pennsylvania right on their doorstep.
“They’re driving through and past us to get those convenience gaming markets.” Jim Kirkos, chief executive of the Meadowlands Regional Chamber, said. “We believe a casino would be incredibly successful.” he added. Which is perhaps an understandable optimism in his position but certainly isn’t one shared by everyone. US Representative Frank LoBiondo has already gone on record as saying “I don’t see how that does anything but hurt Atlantic City.”
The Northern New Jersey casino strategy would pretty much guarantee another fall in the revenues of Atlantic City casinos, and whilst an MRC survey said 93% of business leaders in northern New Jersey thought the Meadowlands site the best location for a new casino in the state, it is unlikely the recently redundant from the Atlantic Club, Revel, Showboat and Trump Plaza would agree with any of them. It also remains to be seen if the public do, residents not having been all that positive about expanding gambling in the state outside Atlantic City.
Can The Market Sustain The Competition?
One of the concerns is that any casino in the state would suffer from the same issues that have beset Atlantic City. The competition will still be as fierce and the market as a whole no larger as Israel Posner, executive director of Stockton’s Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, has pointed out saying, “You’re still looking at a $6bn market. Just because you add more seats on the bus, doesn’t mean you have more passengers.” However Jim Kirkos points to the 6.5 million people who live within 20 miles of the location and who now travel to gamble.
Certainly the Meadowlands site is in such close proximity to the urban sprawl of New York city that it couldn’t fail but to attract gamblers from the big apple but would that be enough to sustain the site in the long term? Would it be a draw for the international market in a way Atlantic City never has? The MRC believe so and are pushing hard for their “multiple themed casino districts” just next door to the MetLife Stadium, home to the New York Giants & New York Jets and the Meadowlands Racetrack that could hardly fail to benefit from the addition of a racino on the site.
Kirkos goes on to point out that unlike Atlantic City the Meadowlands area has a history of attracting big sporting and entertainment events, with the Superbowl being the one that chimes perhaps most. “The region has a history of attracting big events” he confirmed acknowledging that gambling might not be the one residents have shown an interest in getting, but may now be ready to accept. “The conversation in New Jersey has changed.” Which is perhaps understandable given the economic realities.
It would be big casino gambling news to have an operator open and running so close to New York and the financial risks, as well as the rewards all loom large as pressure mounts for a decision to be reached with Atlantic City left relying on pronouncements from Governor Chris Christie’s office which makes it clear they “…will continue to work closely with the city to address its financial challenges as well as those of the gaming industry and to help secure their future.” Which may, on closer inspection not be quite as much support as the city really needs in face of the Meadowlands challenge.