Posts Tagged ‘atlantic city casinos’

Internet Gambling in New Jersey

Tuesday, January 19th, 2010

Internet gambling in the United States is illegal.  It’s cut and dried.  But a recent federal appeals court decision just may have given states the option to offer internet gambling within their own borders.  In cash-strapped New Jersey, which is expected to have the seventh largest budget deficit this fiscal year of the 50 states, the notion has appeal.

State Senator Raymond Lesniak recently introduced bill S3167, which would indeed legalize such popular games as poker, baccarat, blackjack, roulette, craps, slot machines, and more.  With New Jersey’s distinction of having the toughest gambling laws in the United States, implementing the on-line form seems a natural and comforting fit.

Currently, there are thousands of global internet gambling sites.  They are illegal in New Jersey, in part because there is no way for the state gaming commission to determine whether these games offer fair odds.  Many who do still gamble illegally on the internet complain of not being able to collect their winnings.  Would you trust a gambling site located in the Philippines or Bulgaria?

The other reason they are not legal in New Jersey is rather obvious – Atlantic City.  The state’s 11 casinos generated $3.9 billion in revenue in 2009.  While down from $5.2 billion in record-setting 2006, it still is a major contributor to state coffers.

The new internet gambling bill, if eventually made into law, would require all gaming companies to be headquartered around Atlantic City.  The New Jersey Casino Control Commission, also based in AC, would be able to monitor the new companies, plus develop “technical standards for approval of software, computers and other gaming equipment used to conduct internet wagering, including mechanical, electrical or program reliablility, security against tampering, the comprehensibility of wagering, …. blah, blah, blah.”   Did you get all that?

Internet site operators would pay $200,000 the first year for a license, with a $100,000 annual renewal.  They’d also pay a $100,000 non-refundable deposit and another $100,000 towards treating compulsive gambling.  They’d fork over a 20% tax to the casino revenue fund and another tax would give money to the New Jersey Racing Commission.  No wonder so many groups are salivating over the prospect of internet gambling.

AC Mayor Lorenzo Langford spoke in favor of the internet gambling concept, while casino operators seem concerned that the bill might allow video lottery terminals (VLT’s) and slot machines at the state’s race tracks.  The AC casinos are currently paying the horseracing industry $90 million over three years in an agreement that bans VLT’s from tracks.

With New Jersey’s perilious money situation, internet gambling seems like a good revenue producer.  The AC casinos will survive because, let’s face it, you don’t have the glitz of the casinos and shows and entertainers and restaurants sitting at home on your computer.  And you can bet that the 11 casinos will be the first in line to get those new internet gaming licenses.  They see the possibilities!

- Mountain Man and City Girl   http://www.MountainManandCityGirl.com

The blogsite of Jewell Real Estate Agency, Wildwood Crest, NJ  http://www.JewellRealEstateAgency.com

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Atlantic City Woes Continue

Thursday, January 7th, 2010

Pennsylvania Governor Ed Rendell’s expected signature today on a bill to allow table games in addition to its existing slot machines is another bit of bad news for Atlantic City.  The bill passed the state Senate 28-22 previously and the Assembly 103-89 yesterday.  Rendell threatened to layoff 1,000 state workers if the bill wasn’t on his desk by tomorrow (Friday, Jan 8, 2010).  That got legislators moving.

Pennsylvania will now permit up to 250 table games in larger casinos and up to 50 in smaller resort casinos.  Table games are poker, baccarat, blackjack, roulette, craps, and similar games of chance.  The cost of licensing is $16.5 million for the large casinos and $7.5 million for resort casinos, which is a drop in the bucket in the scope of the big picture.  The 14 casinos in the state should add an additional $250 million per year to state coffers.

Atlantic City, the No.2 casino city in the United States after Las Vegas, has seen reduced revenues for over a year, putting an added strain on New Jersey’s already bloated budget deficit.  The monopoly Atlantic City once enjoyed on gambling on the East Coast is ancient history.

Connecticut has three Indian casinos that allow slots and table games, making them the first to cut into Atlantic City’s lucrative market.  West Virginia was next, first having slots at two dog tracks and two horse tracks, then adding table games in 2007.  They recently granted a full gambling license to the infamous Greenbrier Resort in White Sulphur Springs.

Delaware has one poker venue in Wilmington, plus video poker and slots at the three “racinos”, as they call their race tracks with legal gambling.  It won’t be long before table games are installed in each of the sites.

So what is Atlantic City to do?  They will lose much of their Philadelphia area gamblers once the table games open next November or so.  Delaware’s table games will debut around the same time.  No doubt entrepreneurs will add restaurants and resort hotels near the casinos, further damaging Atlantic City’s bottom line.

Atlantic City will need to take advantage of what it’s already got for the dozen casinos, employing 36,000 workers, to be profitable.  That means marketing non-gaming venues.  Upscale, fashionable restaurants with trendy surroundings are already a big draw, as are the 200 retail, brand name, and outlet stores.

Atlantic City also has big name entertainers going for it.  Not a night goes by that the city doesn’t feature a dozen acts targeting every age group.  Glitzy, nouveau nightclubs, with a regular parade of celebrity sightings, is turning AC into a mecca for the 21-40 year old crowd.  And they have bucks to spend.

AC also offers championship boxing matches, plus those new martial art/kick boxing/in-a-cage fights.  There’s also college basketball, including the Atlantic 10 tournament each March.

Last but not least, there’s the beach.  Geez, no other casino in neighboring states has the sparkling white sands and bikini babes.  And the beach is a great place to watch an air show or fireworks or lifeguard competitions or throw a frisbee or ….

Well, maybe Atlantic City should be saying, “Reports of my death are greatly exaggerated.”  Time will tell.

- Mountain Man and City Girl

http://www.MountainManandCityGirl.com

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Atlantic City Gambles on Future

Saturday, December 26th, 2009

Since Atlantic City, New Jersey approved legalized gambling back in the late 1970s, the city has always been in the shadow of Las Vegas.  Everything the tarnished city did to revitalize and rebuild and build a world-class casino atmosphere drew comparisons to Vegas.  And frowns.

Meanwhile, the “Little Engine That Could” plodded on, eventually erecting 13 casinos.  The first, Resorts Atlantic City, opened in May, 1978.  A year later Caesars debuted, then in December 1979 Bally’s opened.  The Sands, Harrahs and the Hilton each opened in the latter half of 1980 and the Playboy Casino and Tropicana were ready for business in late 1981.   Atlantic City now had eight casinos.

 The recession of the early 1980s (sound familiar) halted construction while prospective casino companies sat out the downturn and waited for the economy to get going again.

Trump Plaza got things moving again, opening in May, 1984, then Trump Marina debuted a year later.  The Showboat opened in 1987 and the Trump Taj Mahal in 1990 and then new construction came to a halt.  Time to once again wait for better times.

In 2003, the first modern mega-casino, the Borgata, opened to grand revues and it continues to this day to be the top earner in the city.  The Playboy Club Casino, of course, has long since been closed, then torn down. 

The Sands was torned down in 2007 by Pinnacle Entertainment after purchasing the obsolete casino and its 20 Boardwalk/oceanfront acres for $400 million.  Pinnacle has not begun construction and the company refuses to comment if the $1.5 billion megaresort will ever be built.

Meanwhile, MGM and Boyd Entertainment purchased a 72-acre lot next to the Borgata, envisioning a 3,000 hotel room, 280,000 square foot casino resort to be called the MGM Mirage.  Plans for that project are “on hold” until the economy improves and funding becomes available.

One new Atlantic City hotel casino, the Revel, is about two-thirds through the construction phase.  They broke ground in November, 2007, but in January, 2009 had to lay off 400 workers, leaving 500 to get the steel work and exterior completed.  They need another $1 billion in funding to finish the $2.5 billion project, which is still hopefully scheduled to open in the summer of 2011.  The Revel is 53 stories high, with 1,800 rooms, 20 restaurants, 40 retail stores, and a 5,000-seat theater, plus 150,000 square feet of gambling.

Atlantic City reacted to gambling being legalized in many more states by improving its non-gambling options for visitors.  Shopping opportunities within walking distance of the casinos include the 27-store The Quarter, The Walk with 47 stores, and the Piers at Caesars with over 50 stores.

However, the approval of gambling in Pennsylvania poses a new threat.  The casinos in AC once employed 40,000 people, but that’s now down to 36,000.  Gambling competition also comes from nearby Delaware, New York, and the Indian casinos in Connecticut.

Atlantic City must once again reinvent itself.  The more non-gaming options the better.  The city owns 140-acre Bader Field, a former small airport, just outside of town but practically in the shadow of the casinos.  Maybe a theme park or something similar is the answer.  Whatever, it has to be a FAMILY destination.

If the casinos are to prosper, they must break their long-standing tradition of not supporting anything outside walking distance of their establishments.  Minor league baseball didn’t fly, and pro hockey and basketball were also financial flops.  The casinos must get behind some sort of grand family entertainment at Bader Field.  If not, their market share will continue to drop and Atlantic City, within a four hour drive of 30 million people, will be the punchline of many a joke.

- Mountain Man

http://www.MountainManandCityGirl.com

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