LAS VEGAS – A research paper said the revenue decreases in recent years at Atlantic City casinos are “a cause for concern” and that while other casinos have shown growth, Atlantic City remains vulnerable.
The paper, “Atlantic City Gaming Revenue,” was written by Professor Dave Schwartz, director of the Center For Gaming Research at the University of Nevada-Las Vegas.
The report largely chronicles annual revenue projections since casinos first opened in the South Jersey resort town in 1978.
The paper, done in March, suggests that revenue slippage had taken place well before the economic downturn that occurred between late 2007 and mid-2009.
Since 2006, casino revenue has slipped 36 percent, the paper said.
That year, annual casino revenues hit their peak, at $5.2 billion. But in every year since then revenues were lower than the prior year. In 2007, revenues slipped to $4.9 billion, $4.5 billion in 2008, just $3.9 billion in 2009, $3.5 billion in 2010 and $3.3 billion in 2011.
An even bigger concern is how table games remain less popular than slot games. That has been the case since 1984.
“Since the mid-1980s, table revenues have been stagnant; adjusting for inflation, they’ve seen a large decline,” Schwartz wrote. “Slot gaming has historically been more robust, and its current decline, which predates the recession, is cause for concern.”
He pointed out that until 1999, Atlantic City casinos had larger annual revenue than the casinos on the Vegas Strip were generating.
The report was produced before the most recent revenue figures came out earlier this month that showed a decline as well.
Gov. Chris Christie’s budget for fiscal year 2013 is anticipating a huge increase in gaming revenue, stemming largely from the Revel mega resort that opened a few weeks ago.
In a telephone interview, Schwartz said that casinos sprouting up in nearby states of Pennsylvania and New York have siphoned clientele from New Jersey, particularly in situations where gamers are going to those locales because they are closer to home.
“Pennsylvania’s growth came at Atlantic City’s expense,” he said.
In order to lure them back, he said Atlantic City must fundamentally reinvent itself.
Schwartz said Revel appears to be more than an average casino, adding that it, along with the Borgata and Harrah’s, are “Las Vegas-quality resorts with lots of amenities.”
However, it needs to do more in marketing itself as a destination, and not settle for being a “commuter gamblers” mecca. That means reinvesting more in the city itself, changing some perceptions that the city is unsafe and crime-ridden, and offering more options.
He is not optimistic about the resort’s current “Let’s Do A.C.” advertising campaign.
“It really doesn’t say anything,” he said. “They really need to get a message out there.”
In order for Atlantic City to be something like the East Coast’s equivalent of Vegas, Schwartz said it needs to attract more high-end gamblers who generally prefer table games over slots.
Casino Control Commission spokesman Dan Heneghan addressed Atlantic City’s recent financial struggles.
“Casino revenues have been declining for several years because of increased competition and the general economic condition,” he said. “The result of that is that the tax revenues have decreased.”
Gov. Chris Christie has said Atlantic City’s revitalization is critical not only for that area, but for the state as well.
However, a north/south battle has emerged over gaming, with lawmakers from Northern New Jersey calling for looking into possible casino gaming at the Meadowlands.