On the very topsoil surface, Atlantic City’s casino industry is doing quite well, thank you. Gaming revenues overall have exceeded not just pre-Covid years but the high-water mark of 2006 when the industry reached $5.2 billion. But a lot of layers lie below the topsoil that reveal a more detailed—and less enthusiastic—picture.
The revenue brought in by sports betting and iGaming—certainly the savior in the height of Covid—is not all it seems. In most cases, the operators of these elements take a nice cut out of the total, which if factored out, slash into gaming revenue totals for the casinos.
This and more formed the bulk of Mark Giannantonio’s talk at the monthly Public Relations Council of Greater Atlantic City February 28 at Resorts Casino Hotel. As president of the Casino Association of New Jersey, Giannantonio delivered a state of the industry speech, chock full of statistics. But for his first order of business—this one wearing his hat as president and CEO of Resorts—he issued a denial:
“Resorts is not for sale.”
The speculation otherwise followed an announcement that Mohegan Sun, the casino hotel’s management partner, was leaving the relationship in 2025. Along with owner Morris Bailey, “we made a phenomenal team,” Giannantonio said of Mohegan.
So that rumor is squelched. But city-wide, all is not quite as well beyond the topsoil.
“Visitation is at a 20-year low,” Giannantonio said. “Employment is at a 20-year low. We’re not growing organically.”
When Hard Rock and Ocean Casino opened the same day in 2018, the hope was that the two would grow the revenue pool instead of taking it from existing casinos. They didn’t to any great degree. The former Taj Mahal and the former Revel are doing well, but many others are struggling.
Only two properties saw gross operating profits rise from 2021 to 2022, the last full year of quarterly stats available: Ocean and Hard Rock. Not even Borgata, the perennial revenue leader, could escape the decline in gross operating profits.
“We’ve had five straight quarters of declining earnings,” Giannantonio said.
What the landscape doesn’t pencil into the equations are the future factors which can have a major impact down the road, both good and bad.
Foremost among these will occur 90 miles north of Atlantic City in New York City and its immediate surroundings.
Within that circle, three casino licenses will be issued. In a best-case scenario for Atlantic City, two of these will go to existing casinos—MGM Resorts’ Empire City Casino in Yonkers and Resorts World New York City in Queens—leaving a single license for one of the five boroughs, most likely Manhattan. The properties in Yonkers and Queens, if chosen, would add table games to their massive number of slot machines and existing hotels and amenities, already in operation.
In a worst-case scenario, all three would go to new locations. Manhattan for sure, maybe one near Citi Field in Queens, maybe in Coney Island, moves which would perhaps treble the impact on Atlantic City.
“This will happen,” Giannantonio said. “We have to prepare.”
What the Atlantic City industry can do is take care of business at home, in the bricks and mortar of the resort, he said. Much of this is old news, being brought to the fore once again:
— Safety. We’re talking about what happens when you step outside the confines of a casino hotel, whether on the Boardwalk or in the marina. Bringing an enhanced police deployment to the city is required, Giannantonio said.
— Attractiveness. This goes hand–in-hand with safety. Boarded-up buildings up and down Pacific Avenue, for example, in locales between the casino hotels. Private capital is needed for this.
— Beach erosion. Storms wreaked havoc on the city’s important beach. The beach bars at Hard Rock and Resorts? Gone. “They were wiped out,” Giannantonio lamented.
— Infrastructure. Some good news on this front: Atlantic City has secured $20 million in grant money to enhance the country’s first Boardwalk. The award is part of the $100 million slated for 18 communities.
— Increased marketing. Publicize the resort. Bring in new visitors. Old tales need a new approach.
— Non-casino commercial development. More business, like the proposal to turn much of the former Pier Shops across from Caesars into a studio for film making.
“These are all solvable problems. But the casino industry cannot control everything,” Giannantonio said.
