As Atlantic City’s gaming revenue continues to fall and its newest casino prepares to file for bankruptcy protection, casino gambling continues to grow in the state next-door. The contrasting trends, experts say, have everything to do with “location, location, location.”
The Pennsylvania Gaming Control Board says the Commonwealth’s 11 casinos brought in more than $247 million in gross revenue this January – a two-percent increase over 2012.
Atlantic City’s 12 casinos, by comparison, raked in more than $205 million in January, according to the NJ Division of Gaming Enforcement. That’s nearly $42 million less than Pennsylvania’s gaming houses, which makes Pennsylvania the second-largest gaming market in the United States, behind Las Vegas.
“It’s just a natural when you put a casino into a heavily populated area that did not have a casino close by before, it’s going to do well and Pennsylvania casinos are capitalizing on that,” says Shawn McCloud, VP of Analysis for Spectrum Gaming Group. The independent consulting group works with casinos throughout the region.
Last year, Atlantic City casinos raked in just over $3 billion – a far cry from the peak $5.2 billion in 2006.
“At that time, within a three hour drive of Atlantic City, there were only three other casinos and they were limited to slot machines,” McCloud says. “Fast forward six or seven years and you have 27 casinos within a three-hour drive of Atlantic City, including the 12 in Atlantic City. That is the main reason Atlantic City is hurting.”
Revel, the troubled resort which announced Tuesday it would file for Chapter 11 bankruptcy protection, tallied $7.98 million in wins from table and slot pulls in January, according to state data. The resort opened last March with 1,800 rooms and a price tag of $2.4 billion. But the boardwalk resort has yet to catch on in the seaside town.
In comparison, Bucks County’s Parx Casino earned nearly $2 million more in simply table gaming -- at $9.94 million. Both casinos have roughly the same number of table games on their casino floors. Parx’s total take for January topped $40 million, according to the gaming control report. That’s more than all but one A.C. casino – Borgata – made in January.
Philadelphia’s SugarHouse Casino totaled $22.06 million in revenue, Harrah’s Philadelphia in Chester, Pa. earned $25.03 million, Sands Casino Resort in Bethlehem earned $36.86 million, while the newest casino in Pa., Valley Forge Casino Resort took in $7.26 million.
McCloud says the fact that Pennsylvania’s casinos are spread across the state, instead of being crammed into one city, offers them another advantage. He says it’s too early to say when A.C.’s revenue decline will stop, but says Pennsylvania’s future looks bright even as casinos continue to open in other states and even in Pa.
“We’re still seeing the Philadelphia-area casinos able to absorb the added competition, so I don’t see any reason why that growth is going to slow down,” McCloud says.
To thrive once again, A.C. may have to turn itself into a destination like Las Vegas. Edward H. Spotts, an professor at Temple University's School of Tourism and Hospitality Management, spent more than 25 years working in Atlantic City casinos. He says the seaside resort should put more effort into major events like the Atlantic City Airshow – an event that attracts thousands to the city’s boardwalk.
“They just need to be pulled by something for them to make the investment of time, which is very valuable and worth the fuel cost to come to A.C.,” Spotts said.