Atlantic City has been on the ropes for the past couple of years as new casinos have opened up all around the New York City metro area. Throngs of gamblers have sought out casinos in New York, Connecticut, and Pennsylvania. Some, like the casino at Aqueduct and Yonkers Raceways are utilizing electronic gaming, rather than the typical table games of yore.
In to that situation came Revel Casino, which was hyped as the newest and largest casino. It came with a huge price tag too, and New Jersey also sweetened the deal with $250 million in tax breaks.
None of that has helped as Revel never took in enough money to be sustainable.
It is now filing Chapter 11 bankruptcy.
What went wrong?
Wrong time and place - it was opening as the recession was finally receding, but other casinos with lower costs had opened closer to New York City and Philadelphia in the interim. Atlantic City's hasn't been considered a destination for a gamblers for years. If you've got coin to throw on the tables, you'll be heading to Las Vegas where you can get room and airfare for a comparable amount of money that you'd spend in Atlantic City.
Many of the casinos have suffered from a lack of investment (notably the former-Trump properties), including those that sold for little more than the land value.
While some effort has gone into improving the conditions beyond the boardwalk, Atlantic City is very much a depressing locale to visit. Then again, many of the same complaints could be filed against Las Vegas - which despite its glitz and glamour on the Strip - is still complicit with a seamy underside that has many of the same problems as Atlantic City.
What Vegas has that Atlantic City lacks is the cachet of being a destination for more than a quick jaunt. While there are plenty who come to Vegas for a night, many more are coming for extended periods of time to gamble, see shows, and take in the sights. That's not happening in Atlantic City, and some of that has to do with the casino culture.
There's far too much reliance on the bus junkets from New York City carrying senior citizens and gouging others who might want to spend more money in town. After all, if a casino lowered the cost of a hotel room per night, that would translate into more money spent on the floor - greater buzz and lead to people spending more time and money in the casinos.
Revel wasn't alone in trying to change the culture in Atlantic City to increase spending there; Borgata has done the same with catering to a more affluent set of visitors. The problem is that Revel's costs ballooned and couldn't be sustained.
Now, it's possible that New Jersey will eventually recoup the costs for the tax breaks it gave to Revel. Just don't count on it happening anytime soon.
Labels: Atlantic City, bankruptcy, casinos