A luxury casino goes bankrupt and threatens to close, struggling to survive in a cutthroat market. The world's largest poker website renews its efforts to operate in New Jersey. A new agency ramps up its drive to attract more midweek convention business.
That all happened this past week, showing three of the major changes buffeting Atlantic City and reshaping the nation's third-largest gambling market.
The biggest development came Thursday, when Revel Casino Hotel filed for bankruptcy for the second time in a little over a year. But this time, the casino that cost $2.4 billion to build warned that it will be forced to close this summer if a buyer can't be found through a bankruptcy court auction.
It is the latest manifestation of a problem that has been afflicting Atlantic City since 2007, shortly after the first casino opened in neighboring Pennsylvania: close-by competition in an increasingly saturated market taking customers and dollars away from Atlantic City. The casino that many had hoped would be a game-changer when it opened just two years ago didn't change the game after all; it just lost it.
"They did so much in the early days to be a resort hotel that had a casino rather than a casino hotel and that turned off a lot of casino customers,'' said Steve Norton, an Indiana casino analyst who was vice president of Resorts when it opened in 1978 as Atlantic City's first casino. "They've done a lot since then to change that.''
If a buyer can be found, Revel is expected to sell at a steep discount. Such a buyer could succeed where two previous sets of owners have failed, Norton said.
"They'll be getting it for pennies on the dollar, and coming in that low, as long as their varying revenue can cover their expenses, they'll do well,'' he said.
The day before Revel's bankruptcy filing, a Canadian company that's buying the PokerStars website began talks to get it licensed for Internet gambling. PokerStars, the world's largest poker site, had tried twice to get approved in New Jersey, one of three states that have legalized Internet gambling.
PokerStars tried to buy the Atlantic Club Casino Hotel, but the deal fell apart, and the casino closed in January. PokerStars then teamed with Resorts as its online partner, but New Jersey's Division of Gaming Enforcement suspended PokerStars' application for up to two years, citing an unresolved indictment against the company's founder for the alleged violation of federal gambling statutes and the involvement of certain PokerStars executives with Internet gambling operations in the United States after they were outlawed.
But now that Amaya Gaming Group is buying PokerStars and Full Tilt Poker for nearly $5 billion, the PokerStars executives who concerned New Jersey regulators are stepping down. Amaya began talks with the gaming enforcement division Thursday, and its director, David Rebuck, said he is optimistic Amaya could get PokerStars licensed by fall.
The presence of PokerStars, which had 70 percent of the U.S. Internet gambling market before it became illegal, could breathe new life into New Jersey's fledgling Internet gambling market, which has hit a wall after just six months. The online market has declined for two months in a row and is taking in a fraction of the $1 billion that Gov. Chris Christie predicted for its first year of operation.
And Meet AC, a new group set up to attract meeting and convention business to Atlantic City, hired an executive director with experience running convention bureaus in Kentucky and Rhode Island.
Atlantic City has been working for eight years to try to diversify itself and not rely solely on gambling revenue, which has been plunging for seven straight years. Attracting more meetings and conventions would help fill casino hotel rooms during the week, when hotels are much less busy and rooms sell for break-even prices or even at a loss.
Caesars Entertainment, which is building a $126 million convention center near Harrah's Resort Atlantic City, estimates Atlantic City gets 1 percent of the $16 billion Northeast U.S. convention and meetings market.