Sunday, May 20, 2018

Will Atlantic City’s Two New Casinos Oversaturate Its Recovering Gaming Market?

Casino News Daily
Will Atlantic City’s Two New Casinos Oversaturate Its Recovering Gaming Market?

After several weeks of speculations over the opening of what would be Ocean Resort Casino, it was recently confirmed that the property, formerly known as Revel, would swing its doors open on June 28. And Hard Rock International had previously picked that exact date to reopen the former Trump Taj Mahal as a Hard Rock-branded casino resort.

The emblematic Atlantic City Boardwalk will thus welcome two new stars to its existing seven casino properties. This year is very special for the city as its celebrates the 40th anniversary of its first-ever commercial casino.

For a very long time, Atlantic City was the only place on the East Coast where commercial Las Vegas-style were allowed. And during that time it maintained fervently its spot as America’s second highest grossing gambling hub, with Las Vegas being the largest such hub by annual revenue produced.

However, the decade after 2006, when a number of states in the northeast part of the country opened new casinos and expanded quickly their gambling industries, turned out to be a complete disaster for Atlantic City. It could not manage the growing competition from neighboring states and, as a result, many of its casinos struggled to stay afloat.

The culmination of Atlantic City’s disastrous decade was represented by the closure of five of its 12 casinos in the period between 2014 and 2016 (Revel closed in 2014, while Trump Taj Mahal was shuttered in 2016).

It seems, however, that the popular casino hub might be ready to turn over a new leaf. In 2017, its seven surviving casinos posted a second consecutive year of revenue growth. They generated a total of $2.66 billion, up 2.2% from 2016. The results came as a much needed encouragement.

The opening of the city’s two new casinos is just over a month away and many see that as a sign that recovery is around the corner. On the other hand, less enthusiastic analysts have warned that Atlantic City’s gambling industry might not be ready for expansion yet.

Who are the owners of the two new properties and what have they promised to bring to the city? How will the opening of two casinos impact Atlantic City’s industry? And is the decision for the openings to take place on the same date a reasonable one? Here is Casino News Daily’s view on the topic.

Details about the Two Casinos

Hard Rock International, the Florida-based gaming and hospitality giant, bought the former Trump Taj Mahal from Carl Icahn in the spring of 2017 and just several months after the property’s closure. Hard Rock paid only a fraction of the original prize of what had been dubbed as the eighth wonder of the world by its original owner, US President Donald Trump.

The company then announced that it would spend over $500 million to bring down Trump Taj Mahal’s iconic minarets and replace those by rock’n’roll-style elements the Hard Rock brand is well-recognized for.

Hard Rock obtained the necessary license for the operation of casino gambling from the state Casino Control Commission on May 9, which was actually among the final regulatory steps needed to be completed before the opening of what would run as Hard Rock Hotel & Casino Atlantic City.

The resort will feature a 120,000-square-foot casino with 2,144 slot machines and 120 table games, a hotel with nearly 2,000 rooms, a number of food and beverage options, and a 7,000-seat event center, among other facilities.

Property owners have pointed out repeatedly that they aim to create a unique entertainment destination that will attract different groups of visitors. Hard Rock has revealed plans to book more than 300 concerts and other events at its Etess Arena over the resort’s first year of operation and has announced quite a lineup, with tickets for some of the upcoming events now being sold.

As for Ocean Resort Casino, it will operate at the site of the former Revel, which sadly closed doors in the summer of 2014 after just two years of operation. The hotel and casino resort cost $2.4 billion to be built, but was then sold to Florida-based businessman Glenn Straub for just $82 million. After failing to reopen the property, Mr. Straub sold it to its current owner – Colorado-based real estate developer Bruce Deifik for $200 million. Mr. Deifik invested another $200 million into the property’s renovation and preparation for opening.

News emerged in April that Ocean Resort Casino would open on the same day as Hard Rock Atlantic City. However, it was not until mid-May that it was confirmed the property would launch namely on June 28.

In a recent interview with The Associated Press, Mr. Deifik said that they wanted to learn from and avoid Revel’s mistakes, and to debut Ocean Resort Casino as a friendlier property than it predecessor was. The new resort would thus offer designated areas at its casino for smokers, unlike Revel which banned smoking inside the gaming floor.

Ocean Resort Casino will also welcome pedestrian traffic to its gambling facility. Construction workers recently brought down the wall that separated the casino from the Boardwalk. That wall is set to be replaced with a door and stairs that would allow visitors into the gaming floor directly from the Boardwalk.

Mr. Deifik’s casino is yet to receive a license from the New Jersey Casino Control Commission. This is expected to happen at the regulators meeting on June 6.

Expectations

Many were perplexed by the announcement that Atlantic City’s new casinos will open doors on the same date. However, industry representatives explained that the decision might actually prove to be a move in the right direction.

Global Gaming Business magazine publisher Roger Gros has explained that while the opening of Hard Rock Atlantic City is the event mainly focused on, Ocean Resort Casino will thus be able to feed on and draw attention to itself on the opening date.

Experts also believe that the opening of two properties on the same day will certainly attract greater attention and visitors, as many would want to witness such a historic moment. It is also important to note that the launch of the two casinos will take place just days before July 4. The holiday is traditionally among the busiest periods of the year for Atlantic City’s casinos and as it lands on Wednesday this year, the city’s two new properties will surely hope to cash in during the weekend before and after.

There have also been concerns that two new gaming venues might not be the best scenario for Atlantic City, now as its revenue has been recovering with seven operational properties. According to many, Hard Rock Atlantic City and Ocean Resort Casino might oversaturate the local market and pull it back where it was several years ago when many of its gambling floors were struggling to stay afloat.

It is yet to be seen whether the new resorts will help the once thriving casino hub recover at least part of its former glory or bring a new wave of financial and other related issues. One thing is important to note, both new properties are looking to provide visitors with unique experience and this could certainly be of great help at a time when customers, both gambling and non-gambling, are looking namely for diverse experience.

The post Will Atlantic City’s Two New Casinos Oversaturate Its Recovering Gaming Market? appeared first on Casino News Daily.

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