\nCut by casino closings, gaming mecca looks to stop the bleeding<\/p>\n
\tBy S.P. Sullivan | NJ.Com\/SPECiAL \u2009 To THE STAR-LEDGER<\/p>\n
\t At its peak in 2006, Atlantic City was home to 39,000 slot machines. Since then, neighboring states that have legalized gambling have added 36,000 slots of their own, creating a gambling landscape like piles of poker chips spread across the Northeast. Now the impending closing of two and maybe three more Atlantic City casinos has state lawmakers pushing to expand gambling to North Jersey, and local leaders looking to broaden the resort city\u2019s image as a convention hub and vacation spot.<\/p>\n
\t Mayor Don Guardian calls his city, which once held a virtual monopoly on East Coast gambling, \u201ca destination in transition.\u201d That transition has been painful this year. Trump Entertainment Resorts announced last week that it plans to shutter Trump Plaza Hotel and Casino by the fall, the fourth facility to announce this year that it was either closing or seeking buyers.<\/p>\n
\t The Atlantic Club closed in January after being bought out by competitors Tropicana Entertainment and Caesars Entertainment. Caesars intends to shut its still-profitable Showboat casino on Aug. 31. Revel, which has been in and out of bankruptcy since 2012, is being put up for auction.<\/p>\n
\t The closings have amplified calls to expand casino gaming to the Meadowlands and Jersey City.<\/p>\n
\t Gov. Chris Christie, who had stood firm behind a five-year plan for Atlantic City\u2019s recovery that would put off such talks until 2016, has suggested he\u2019s now open to discussion. But labor leaders and some of Atlantic City\u2019s elected officials say national media reports of the resort city\u2019s downfall are premature. They\u2019re fighting to keep the troubled casinos open.<\/p>\n
\t A BAD YEAR<\/p>\n
\t Christie has been bullish on Atlantic City\u2019s recovery, saying in December that 2014 would be a \u201cpivotal year.\u201d His administration\u2019s projections for internet betting operations, which are partnered with Atlantic City casinos, were for an ambitious $1 billion for this year.<\/p>\n
\t But Fitch Ratings, which initially projected a more conservative $200 million to $300 million in internet gaming revenues, further tightened its projections last week. The Wall Street credit-rating firm now says it expects New Jersey to rake in $120 million to $130 million.<\/p>\n
\t Lawmakers and the governor\u2019s office had hoped that Atlantic City and the state\u2019s racetracks would be bolstered by efforts to overturn a federal law prohibiting sports betting here. New Jersey spent around $3 million appealing court rulings maintaining the prohibition.<\/p>\n
\t The state brought the case as far as the U.S. Supreme Court, which declined to hear the state\u2019s appeal, effectively maintaining the ban.<\/p>\n
\t A Christie spokesman did not respond to requests for comment.<\/p>\n
\t Brian Miller, a gaming analyst for Bloomberg Industries, said there are some \u201csilver linings\u201d in the recent bad news. He said the impending closings are just a sign that the Atlantic City market is \u201cbeginning to right-size itself\u201d to current demand.<\/p>\n
\t \u201cThings are definitely bad,\u201d he said. \u201cBut there\u2019s still a baseline of business there that\u2019s pretty big.\u201d<\/p>\n
\t Although annual revenue has fallen far from a 2006 high of $5.2 billion, last year saw nearly $3 billion, according to the state Division of Gaming Enforcement.<\/p>\n
\t Miller said the revenues left on the table by the closing casinos will be spread among the remaining facilities, most of which remain profitable.<\/p>\n
\t \u201cThat is going to help them, hopefully, continue to survive,\u201d he said.<\/p>\n
\t Still, he said, \u201cprobably the best long-term solution, both for the existing industry in the state and the tax revenue base, is to expand up north.\u201d<\/p>\n
\t MEADOWLANDS CASINO?<\/p>\n
\t Atlantic City has had a statewide monopoly on casino gambling since New Jersey voters passed the Casino Gambling Referendum in 1976. But the city\u2019s declining gaming revenues, coupled with the proliferation of casinos in neighboring states, have lawmakers looking north.<\/p>\n
\t Christie\u2019s five-year plan, implemented in 2011, would keep all discussion of that expansion off the table until 2016. But Senate President Stephen Sweeney (D-Gloucester) recently said that a statewide ballot proposal to expand gaming could come as early as 2015, and the governor has indicated he\u2019s open to discussion.<\/p>\n
\t For years, advocates have been pushing for a casino at the Meadowlands Sports Complex. The Star-Ledger reported last week that venture capitalist Paul Fireman also wants to build a casino near Liberty State Park in Jersey City.<\/p>\n
\t North Jersey lawmakers, meanwhile, have introduced legislation that would tax North Jersey casinos at a rate far higher than the 9.25 percent Atlantic City\u2019s facilities pay.<\/p>\n
\t The current bill calls for a rate of 66 percent of gross revenues, but Sen. Paul Sarlo (DBergen), a co-sponsor, has said that figure could come down.<\/p>\n
\t Chris Eilert, Sarlo\u2019s chief of staff, said that money would be divvied up between North and South, with the majority going to the state\u2019s general fund, and the rest split between Atlantic City and towns in the Meadowlands.<\/p>\n
\t Eilert said the money would help bolster Atlantic City\u2019s recovery, and that a Meadowlands casino would be a major draw for New York City gamblers who may not be willing to travel to South Jersey.<\/p>\n
\t \u201cAtlantic City has already lost the day-tripper market in North Jersey\u201d to facilities in New York and Pennsylvania, Eilert said.<\/p>\n
\t Alex Bumazhny, a gaming analyst for Fitch Ratings, said Atlantic City\u2019s main problem over the past couple years has been increased competition, so a cut of the North Jersey pie wouldn\u2019t be enough.<\/p>\n
\t \u201cThere would be some offset from the allocation of tax revenues for the city, but I think overall it would still be a negative,\u201d he said.<\/p>\n
\t Union leaders and state lawmakers representing Atlantic City say a Meadowlands casino is not yet a foregone conclusion. Trump\u2019s closure would affect more than 1,000 workers, and the four casinos combined would mean the loss of nearly 8,000 jobs.<\/p>\n
\t \u201cThe workers aren\u2019t lying down for this,\u201d Bob McDevitt, president of Local 54 of the Unite-HERE union, which represents casino employees, told the Associated Press. The union has been rallying outside the casinos and actively courting buyers.<\/p>\n
\t Showboat\u2019s owner, Caesars Entertainment, has indicated it would sell instead of closing if given the right offer. A spokesman for the company did not respond to a request for comment.<\/p>\n
\t Assemblyman Vince Mazzeo (D-Atlantic) opposes a northward expansion, and said he will fight a statewide referendum. He wants the state to put pressure on private equity firms that own casino parent companies and have benefitted from New Jersey\u2019s investment of public pension funds.<\/p>\n
\t \u201cMore than $1.7 billion in New Jersey public pension money has been invested in the companies that own and operate Caesars\u2019 four casinos in Atlantic City, including Showboat,\u201d Mazzeo said in a statement. \u201cWe need to take a long hard look at how and why state funds are propping up multi-billion dollar companies at the expense of Atlantic City\u2019s workers and economic viability.<\/p>\n
\t REINVENTING A.C.<\/p>\n
\t Local business and city leaders say they want to protect as much of Atlantic City\u2019s gaming revenue as possible, but in recent years have been pushing to broaden the city\u2019s appeal with their \u201cDo AC\u201d campaign and efforts to bring other businesses to the boardwalk.<\/p>\n
\t Hotels were at 95 percent occupancy over the July 4th weekend, and non-gambling revenue in Atlantic City is up $162 million in the past two years, according to the Atlantic City Alliance, the city\u2019s nonprofit marketing arm.<\/p>\n
\t That\u2019s not enough to make up for the decline in the casinos\u2019 take, but it is a sign that the city has more to draw visitors than just slot machines, said Liza Cartmell, who heads the alliance.<\/p>\n
\t Cartmell said there\u2019s room for growth in Atlantic City\u2019s retail, hotel and convention space offerings. The city also has a strong health care industry, she said, and nearby Richard Stockton College is eying a new campus within the city, possibly moving into a former casino space.<\/p>\n
\t \u201cRemember, we\u2019re oceanfront,\u201d she said. \u201cWhere else on the East Coast do you see such an available level of real estate that has the opportunity for such a turnaround?\u201d<\/p>\n
\t But some worry about what will happen if that turnaround doesn\u2019t happen quickly. Tricia Lynn, who moved to the city two years ago, said she\u2019s worried about the spate of closings. Problems including crime and prostitution will only worsen in their wake, she said.<\/p>\n
\t \u201cOnce these casinos close, it\u2019s going to be a madhouse,\u201d she said.<\/p>\n
\t Alan Steinberg, of Great Neck on Long Island, spent the day in Atlantic City last week with his mother, Pearl Ginsburg. They\u2019re the kind of customers city leaders dream about, spending the day eating in the restaurants, shopping along the boardwalk and gambling at Trump Plaza and Bally\u2019s, where Ginsburg said she won $23 on the slot machines.<\/p>\n
\t \u201cI didn\u2019t do as well as she did,\u201d her son said.<\/p>\n
\t Although they live in New York, Steinberg said he visits two to three times a season and would keep coming even if more facilities opened in his home state, or North Jersey.<\/p>\n
\t \u201cWe wanted to visit a place that, in a few hours drive, feels like a real vacation place,\u201d he said. \u201cThis place has the boardwalk, the beach, the salt water taffy, the history. There\u2019s a lot more going on here than sitting in a casino. Nobody offers everything else.\u201d
\n\tThe boardwalk outside Trump Plaza in Atlantic City is quiet Thursday. It is one of two casinos that will be closing, joining the Atlantic Club, which was shuttered in January. A fourth casino is for sale but could be closed.<\/p>\n
\t John o\u2019boyLe\/ the StaR-LedgeR<\/p>\n
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