Firm: New casinos could kill half of Atlantic City’s 8 casinos
Friday, June 3, 2016
ATLANTIC CITY, N.J. — A Wall Street analyst predicts as many as half of Atlantic City's eight casinos could be forced to close if voters in November approve two new casinos just outside New York City.
A Monmouth University poll released Thursday shows voters evenly divided on whether to authorize construction of two new casinos near New York City. Hours later, Fitch Ratings predicted that one to four Atlantic City casinos could be forced to shut down if new casinos are built in northern New Jersey.
That prediction is similar to one made by Resorts Casino Hotel president Mark Giannantonio at a major gambling conference last month. He said three to five of his city's casinos could go under if faced with in-state competition.
In its Thursday report, Fitch listed the Trump Taj Mahal, Resorts and the Golden Nugget as the most vulnerable. It also said Bally's faces an uncertain future.
The firm said a 25 percent decline in gambling revenue would wipe out the Golden Nugget's operating income before management fees. It also said a decline of 10 percent in gambling revenue would put the Taj Mahal at risk, while a decline of 20 percent would imperil Resorts.
If the referendum does pass, Fitch predicted it would take four years for a new casino to open closer to New York.
But others have predicted a shorter time frame, particularly at the Meadowlands Racetrack, where operator Jeff Gural and Hard Rock International propose a casino at the existing track complex. The other leading proposal is for Jersey City, where footwear magnate Paul Fireman proposes a casino costing up to $5 billion.
The Monmouth poll found 48 percent of voters in favor of the northern New Jersey casinos and 48 percent opposed.
The telephone poll of 806 adults conducted from May 23 to 27 has a margin of error of 3.7 percentage points.
The poll also found that most voters believe expanding casinos to other parts of the state will hurt Atlantic City. The new casinos would have to contribute part of their revenues to help Atlantic City.
Respondents said that expanding casino gambling will bring some economic benefits to the state overall: 12 percent said it will help the state's economy a great deal, while 42 believe it will help somewhat.
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