Atlantic City Casino Competition Report: Brick-and-Mortar Concerns

Atlantic City casinos are gearing up for new casino competition from nearby New York City. This report reveals the need for Atlantic City resorts to reconsider their strategies to maintain long-term viability.

Key Insights

• Increased Competition: New York City is set to introduce major gaming properties that could threaten Atlantic City’s market share.
• Stable Visitor Numbers: The number of visitors to Atlantic City has seen only slight increases in recent years, and remains below pre-pandemic levels.
• Economic Contributors: Despite challenges, Atlantic City casinos continue to contribute significantly to the regional economy in New Jersey.

Profitability Amid Challenges

All nine casinos in Atlantic City were reported to be profitable last year, but a newly released study raises alarms about their future competitiveness, especially with the opening of billion-dollar gaming properties in New York City.

Economic Impact Study

For the second consecutive year, Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality, and Tourism published the study, titled “Impact: Atlantic City Casino Industry.” The report provides insights into the economic contributions of the gaming sector and highlights the need for collaboration among all stakeholders to ensure the industry’s future.

The study revealed that while overall gross gaming revenue (GGR) increased by 9% from 2023, the revenue from traditional brick-and-mortar operations declined by over 1%. The resurgence in online sports betting and internet casino gaming has not been enough to bring land-based GGR back to pre-pandemic levels.

Revenue and Cost Challenges

Atlantic City casinos have been directing a significant portion of their online sports and iGaming earnings to third-party partners like FanDuel and DraftKings, resulting in net revenues dropping by 0.5% in 2024, totaling $3.31 billion.

Jane Bokunewicz from LIGHT noted that the stagnation of traditional casino revenues is alarming given the substantial investments made by Atlantic City properties to enhance the in-person gambling experience amidst pressing inflation and market challenges. This financial strain does not provide sufficient leverage to cover escalating operational costs.

Visitor Numbers and Economic Contributions

According to LIGHT’s estimates, approximately 18 million visitors flocked to Atlantic City in 2024. This marked a slight rise compared to 2023, but it still signifies a decline of about two million visitors since 2019 and six million fewer than in 2009.

Despite the challenges, Atlantic City casinos play a vital role in the local economy, providing around 23,000 jobs, contributing $883 million in taxes, purchasing $605 million in local goods and services, investing $205 million in their properties, donating $1 million to charitable causes, and volunteering over 7,000 hours.

Looking Ahead: The New York Factor

By the end of 2025, New York is expected to finish its bidding process for three casino licenses. Each license is accompanied by a hefty $500 million fee to operate games in New York City, Long Island, or Westchester County, posing a significant threat to Atlantic City’s market.

Bokunewicz emphasizes the necessity for Atlantic City to solidify its position amidst rising competition. The city has benefited from NYC as a feeder market for years, and walking the fine line of revitalization is crucial, particularly with the expansion of casinos in downstate New York.

“Continued investment and revitalisation in Atlantic City is more vital than ever with the new New York casinos on the horizon,” she concluded.

Conclusion

The ongoing struggle of brick-and-mortar casinos in Atlantic City against the backdrop of New York City’s booming gaming industry highlights a pivotal moment for this iconic destination. As planning for new gaming venues unfolds in New York, the strategies that Atlantic City’s resorts deploy will be critical in shaping their future success and the vitality of the region’s economy.

As the gaming landscape evolves, Atlantic City must adapt to not only attract but also retain its guests in an increasingly competitive market.