P.T. Barnum is credited with saying ....

There's a sucker born every minute

Maybe Moody's and the capital markets are figuring out that the supply is not limitless.

Moody's Doubts AC Casino Reforms Will Work
Moody's doubts whether proposed Atlantic City casino changes will work to end slide

A key corporate credit ratings firm doubts that changing Atlantic City's gambling rules, including allowing smaller casinos and betting on sports and via the Internet, would help end the city's four-year slump.

Moody's Investors Service said in a report issued Monday that the proposed changes could send money "in one pocket, out the other" because gamblers aren't ready to spend more and the changes aren't likely to interest more consumers in gambling.

New Jersey lawmakers are proposing the changes to try to breathe new life into the nation's second-largest gambling market. But Moody's says Internet and sports betting will likely set off "a casino arms race" with Pennsylvania, New York and Maryland, which would likely allow them as well.

"The measures carry mostly negative credit implications that will effectively move revenues from one bottom line to the next without necessarily expanding them," the credit agency wrote in its report.

A state senator shepherding many of the changes through the state legislature called the report "a familiar refrain."

"I don't think we can sit here and do nothing," said Sen. James Whelan, the Democratic former mayor of Atlantic City. "My experience in most of a lifetime in Atlantic City has been that you need new product.

"If you do nothing, we'll continue to see a 25 percent slide over the next two years," he said. "Instead, we have an opportunity to attract back the market segment that we've lost."

Instead of invigorating Atlantic City's gambling market by adding new investment, allowing casinos with as few as 200 hotel rooms will cannibalize existing casinos like the Borgata, Harrah's and the Trump casinos, the rating company said.

"If the proposals survive legal challenges, we do not believe neighboring states would sit still," Moody's said. "New York, Pennsylvania and Maryland are likely to embark on a casino arms race, moving to legalize both sports betting and Internet gambling as a way to protect operators such as Yonkers Racing Corp. in New York, and Mohegan Tribal Gaming Authority in Pennsylvania.

"We do not believe Internet gambling and sports betting will grow the overall market because consumers will continue to feel pressure from economic forces such as high unemployment for quite some time," the report read. "We expect revenue would go in one pocket and out the other as gaming companies use different forms of gambling to vie for the same customer base."

The smaller casinos bill has passed both houses of the legislature and is awaiting action by Gov. Chris Christie, a Republican who has called for greater state control over Atlantic City's casino district. Other proposals need action by one or more branches of the legislature.

Atlantic City is in the fourth year of a revenue slump brought on by the nationwide economic downturn and by casinos opening in neighboring Pennsylvania, New York and Delaware.

Trading in stock of the nation's largest publicly held casino companies was quiet Monday. Shares of Las Vegas Sands rose 44 cents to close at $50.50, MGM Resorts International fell 3 cents to $12.26 and Wynn Resorts shares edged up 14 cents to $102.23.