Is Atlantic City ready for the next wave of casino competition?

Atlantic City operators already lost many customers 15 years ago when Yonkers Raceway and Aqueduct each launched thousands of slot machines adjacent to these horse racing facilities. But almost all of these customers are playing for small bets. These are the “whales” who spend six or seven figures a year in casinos that could abandon Atlantic City if three New York-area casinos – two of which could simply be the scaling of the Yonkers and Aqueduct sites – offer. amenities comparable to Atlantic City counterparts.

After years of decline, four of Atlantic City‘s 12 casinos closed in 2014: the Atlantic Club, Showboat, Trump Plaza and Revel. A fifth, Trump Taj Mahal, closed its doors two years later.

Hard Rock opened in mid-2018 as a revamped version of the latter casino, while Ocean Casino launched on the same day as a reincarnation of Revel. The city has remained at a total of nine casinos since.

But will the industry hold its place once the New York-area casinos open?

“The last thing we need is another casino shutdown,” said Allen, an Atlantic County native who started working at AC casinos over 40 years ago. “Atlantic County, New Jersey, was number one in America in terms of foreclosures after these casinos closed.”

Allen said it was essential that state officials and casino operators “come together, because I don’t know if we have another life to get us to 100. So many times Atlantic City has had its challenges, but he always bounced back. I’m just not sure the city can absorb another 30-40 percent loss in revenue.

Allen has a preference between city and state

Much of Atlantic City was taken over by the state five years ago, but Allen has praised city officials.

“I have to compliment the mayor [Marty Small Sr.] and the city of Atlantic City, ”Allen said,“ because I used to be that fool that said, ‘Can we at least cut the grass?

“The city is doing a great job with this,” he added. “When you leave here tonight, look at the sidewalks, look at the signs, look at the landscaping.

“You can tell where the city is doing it. … One block is beautiful, the next block is completely crazy.

“Why can’t we take some of this vacant land and just make it green? Allen asked, while praising the revival of Asbury Park to the north.

Other thoughts from the CEO

DraftKings’ meteoric rise in the U.S. sports betting industry has been hailed by Allen – but with a caveat.

“Does anyone know the cost of getting a client in this space?” It’s over $ 500, and in many markets it’s up to $ 1,000, ”said Allen. “I don’t think it works in the long run.

“So what’s going to happen in two, three, five, seven, eight years? We envision 2026, 2027 as years in which a huge consolidation will have taken place. “

The deal reached this summer between the Seminole tribe – which owns the empire of Hard Rock casinos, hotels, and restaurants – and Florida state officials to bring legal sports betting to state-owned Seminole casinos and, if the tribe wins in court, statewide bettors on their smartphones “wasn’t cheap,” Allen said.

“We didn’t have to restore our revenue share until the year 2030,” Allen said. “Frankly, $ 400 million a year multiplied by nine years is almost $ 4 billion. Is it still worth it? It is one hundred percent.

In addition to plans to express formal interest in the New York casino process in December, Allen told the ECGC hearing that Hard Rock would do the same for a downtown Chicago casino project to ‘by the end of this week.

Allen added that the company still plans to build a casino on the Las Vegas Strip once the right location is secured.

“We 100% believe that a hotel in the shape of a Hard Rock guitar in Las Vegas would, in the long run, be potentially very profitable for the tribe and for the Hard Rock brand,” Allen said, noting the number of Floridians and Hard Rock supporters. who visit Las Vegas every year.

Photo: Jon Bilous / Shutterstock

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