New York City casinos will undoubtedly impact nearby gambling jurisdictions. But to what extent seems to vary depending on who you ask.
The general consensus is that full-scale casino resorts in New York City will pull gamblers away from places like the Poconos, Connecticut’s tribal reservations and, most significantly, Atlantic City. The Jersey Shore gambling mecca is not fully recovered from the COVID-19 pandemic, nor has it ever fully recouped its losses stemming from the Great Recession.
Others believe that the incoming NY casinos could benefit surrounding areas if the conditions are right. Cross-promoting between destinations and expanding regional market share are appealing ideas to most gambling operators.
New York casinos are coming … soon
Last year, lawmakers in Albany approved three casino licenses for downstate New York, which includes NYC, Long Island and Westchester County.
Two licenses are expected to go to existing racinos in Yonkers and Queens. The remaining license could bring a casino to Manhattan, Brooklyn or The Bronx.
A three-member board will make recommendations to the state Gaming Commission, which will ultimately decide who is awarded licenses. An announcement is expected to be made later this year.
Atlantic City to NYC gambling pipeline not in new Super Mario Bros. movie
Five of the 10 downstate NY casino license suitors operate casinos in Atlantic City. Caesars Entertainment, which has proposed a Times Square casino, operates three AC gambling parlors – Caesars, Harrah’s Resort and Tropicana.
Joe Giunta, senior vice president and general manager of Tropicana AC, told PlayNJ that Caesars Entertainment views an NYC casino as advantageous to Atlantic City.
“A Caesars Entertainment casino in New York City would be a boon for us. It’s wonderful for us because we’ll have a pipeline to drive that business down to (AC) and for us to drive business back to the city.”
Other AC casino operators bidding on a NY license include Bally’s Corporation, MGM Resorts International, Mohegan Gaming and Hard Rock International. Some executives of Atlantic City casinos also vying for a downstate New York license are less optimistic, even if they share the opinion that an NYC to AC casino funnel is possible.
Gambling pie only so big, so who’s going to eat?
Last year, Jim Allen, chairman of Hard Rock International and CEO of Seminole Gaming, estimated that an NYC casino could generate up to $2 billion in annual gaming revenue. Analysts with Bank of America recently estimated that three downstate NY casinos could produce nearly $5 billion per year.
“The question is, how much of that is going to come from Atlantic City?” he asked.
At the same employee appreciation event for Hard Rock AC employees, Allen said roughly 30 to 35% of their database are customers from the greater NYC metropolitan area. He acknowledged that a Hard Rock casino in New York (or even North Jersey) could share customers with Atlantic City.
“There’s certainly the ability to have more than one product in a geographic area, as we’ve done many times in our industry.”
Gambling in the US appears more widely accepted and more profitable than at any previous time in history. According to the American Gaming Association, gambling revenue set a record in 2022 at $60.4 billion. Currently, 34 states and the District of Columbia feature commercial gaming markets, including casinos, sports betting and online gambling.
Those figures are encouraging for anyone who believes that the Northeast/I-95 corridor can withstand additional gambling expansion. Those who subscribe to that idea in South Jersey are few and far between.
Atlantic City always feels like it’s in survival mode
The conventional thinking in and around Atlantic City is that more casinos and competition are not good. AC was once a $5 billion market (2006). The Great Recession and Pennsylvania casinos cut gambling revenues in half in less than five years, resulting in the closure of five casinos over two years (2012-2014).
George Goldhoff, president of Hard Rock AC, recently told PlayNJ that the worst-case scenario could happen in AC.
“I believe that Atlantic City will adapt, which is to say that there may be a few less casinos in Atlantic City when New York opens up,” he said.
Goldhoff said a “large portion” of Hard Rock AC’s database is NY players, “and they will have options, and they will have convenient options.”
“The Atlantic City market would shrink a bit, which means it’s a little bit of survival of the fittest,” he said before adding that his company is committed to AC regardless of what happens with NY. “Hard Rock will remain in Atlantic City, and we will continue to do well.”
The 2022 AC casino profit reports highlight the industry’s current economic challenges. National factors, such as inflation and increased costs, are hurting the casinos’ bottom lines. But local issues, such as tax payments, labor contracts and the growth of online gambling, are also chipping away.
Sen. Addabbo believes NJ is nervous about NY casinos
New York’s downstate casinos will be a topic of conversation at the East Coast Gaming Congress in Atlantic City on April 19-20. Sen. Joe Addabbo Jr., chair of the New York Senate Committee on Racing, Gaming and Wagering, expects to speak on a panel at ECGC.
The senator, who successfully pushed for online sports betting and continues lobbying for online casinos in NY, knows AC casino executives remain anxious about NYC gambling.
“Jersey’s nervous about a Manhattan casino. I don’t hear that with any other site. I hear it with Manhattan.”