[toc]Everyone, Glenn Straub included, sees value in the shuttered Revel Casino. Straub still claims to be reopening it as TEN…someday. Meanwhile, numerous other groups claim they are buying the property.
But here’s a question: Are we sure Revel is such a safe bet?
After all, the casino tried and failed once already. You may argue that Atlantic City is on the rebound. True, it is in a much better economic place than it was in 2014.
However, with so many casino projects in the works, it is time to worry about over-saturation. As Atlantic City learned before, sometimes there is such a thing as too much of a good thing.
There is such a thing as too many NJ casinos
Let’s start with the positive news. Atlantic City is on the economic rebound. In 2016, overall casino revenue was up 1.5 percent over the previous year. It was the first revenue increase for the industry in a decade.
So far, 2017 is faring even better. Thanks, in part, to big numbers from the NJ online gambling sites, revenue is up once again. Now that business is back to booming, several groups are trying to get into the market.
Another major draw? The possibility New Jersey could get into the sports betting business if its Supreme Court case goes its way.
However, history shows us there is a threshold of how many casinos the city can sustain. Currently, there are seven casinos operating in the city. Just a few years ago, that number was higher.
Since 2014, the following properties shut their doors:
- Showboat
- Trump Plaza
- Trump Taj Mahal
- Atlantic Club
- Revel
Of those, four closed in 2014, while Trump Taj Mahal closed just over a year ago. It is no coincidence that just over two years after the market lost roughly one-third of its casinos, the remaining operators began to bounce back.
Atlantic City’s position is arguably getting worse, not better
With increased competition in places like Philadelphia, upstate New York, and casinos about to open in Massachusetts, Atlantic City simply does not have an East Coast casino monopoly anymore.
In fact, with its limited airport access and the new gambling expansion plan underway in Pennsylvania, its position is arguably getting worse, not better. What New Jersey does have working in its favor is a seasoned online casino market, which now comprises roughly 10 percent of all NJ casino revenue.
Still, companies are clamoring to get in. Hard Rock International purchased Taj Mahal. The company plans to reopen the casino this summer.
Showboat reopened without a casino element, which is a possibility the Atlantic Club considered as well. Several other companies, Straub’s included, intend on pursuing a casino, however.
In addition to Revel, there is also a forthcoming project from Caesars and MGM Resorts. There is also a new tower project in the works from a company which, after failing to buy Revel, bought the plot next door.
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Luxury casino resorts struggle in New Jersey
As mentioned, sports betting will certainly bring a boost to the industry should it pan out. While most predict a victory for New Jersey, that is not a done deal yet. Even if it is, that does not necessarily provide enough evidence that Revel could succeed a second time around.
Currently, Borgata is the closest thing the city has to a Vegas-style, high-end resort casino. If Revel learned anything its first time around, it is that there is not as big a market for that as it initially thought.
Atlantic City is a regional casino location with an increasing amount of competition. The NJ online casino market consists of people who live in or near New Jersey. With that type of clientele, Atlantic City serves more as a place to gamble as opposed to a place to go on a luxury vacation.
The struggle of high-end New York casinos only lends credence to the idea that what works in Las Vegas is not how to succeed on the East Coast. Casinos certainly need to be nice, but catering to the boutique clientele of an Aria Casino or Cosmopolitan could result in TEN suffering the same fate as its predecessor.
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