New Jersey Officials Considering Atlantic City Casino Cap
Currently, in Atlantic City, New Jersey, there are nine casinos in operation. Two new additions were made in the summer of 2018, but before there were only seven casinos, far from the number that used to operate in the region. The gambling city is doing well but many officials of the state are now questioning whether or not a cap should be placed on how many casinos can operate in the region.
Rutgers University Report
A report was presented this week by Rutgers University to a State Assembly panel that highlighted the market, discussing that the casino market of the northeast United States is saturated and that new casinos will be harmful to Atlantic City.
Jim Johnson, an individual who work with Governor Phil Murphy, suggests that a cap be put in place on the number of licenses available for the region. He feels the health of existing casinos in the region are a serious concern. As new casinos open in neighboring states, Johnson feels that the industry in Atlantic City will become vulnerable.
The report by Rutgers predicts that a casino set to open in Philadelphia will have a major impact on Atlantic City. The facility will be home to 2,000 slot machines and they could divert as much as $150 million in revenues that is currently being spent in Atlantic City.
Assemblyman Ralph Caputo seems to be on board with the cap, stating that an idea to restore casino gaming at the Showboat is a bad idea. The property currently offers hotel stays but no gambling, though owners are considering the option. According to Caputo, the overall gambling revenue in Atlantic City has increased since the Hard Rock Casino and Ocean Casino Resort opened in June 2018. However, the gross operating profit for casinos has decreased since the new casinos launched.
The worry among lawmakers is the issues that took place back in 2014 and 2016. During that time, casinos began to close, which lead to a loss of five venues. The closings put the city out of revenues and close to 8,000 people without employment. Due to the issues within the gambling industry, at the time, the region had one of the highest foreclosure rates in the US.
Officials do not want to see this happen again. Because of the closures and gambling revenue losses, Atlantic City faced major financial struggles. The state is still trying to stabilize the finances of Atlantic City, though the region has seen a huge turnaround over the past few years.
The overall goal of officials is to improve the quality of life for residents. If the casino were to experience a slowdown as it did a few years ago, the residents would suffer. Because of this fear, several lawmakers are now showing support in consideration of gaming venue cap.
As competition continues to grow in neighboring states, Atlantic City is certainly going to be affected. States and regions where gambling was not formerly offered will see residents of those regions staying there instead of traveling to Atlantic City.
Back in 2007, increased competition from Delaware, New York and Pennsylvania, was the beginning of the downturn for Atlantic City. Thankfully, the region has been able to come back, but how long will it last? It will not be surprising to see consideration given to licensing restrictions and the industry eventually staying as is to avoid any major issues in the future.