Christie Pushing for Improved Atlantic City Revenue in 2014
There’s only one full day remaining in 2013, but for New Jersey Governor Chris Christie the year is clearly already over and his mind is in 2014.
Specifically, Governor Christie, who was re-elected to a second term last month and whose name is often mentioned as a frontrunner for the 2016 GOP presidential nod, is warning that without “significant results” from Atlantic City’s twelve (soon to be eleven – more on that below) land-based casino properties, he will allow gambling to creep into other regions of the Garden State.
Clock ticking on five year “grace period”
According to the Press of Atlantic City, with time running down on a five-year grace period that was meant to allow the dozen casinos in Atlantic City to halt the revenue loss that has plagued the city’s gambling economy in recent years, Christie is now open to the development of casinos in other regions of New Jersey.
One year remains in the grace period, making 2014 an important one for the long-struggling seaside gambling mecca, which has been losing gamblers across state lines as casinos proliferate in Pennsylvania and other nearby states.
“It’s obviously a critical year because we need to begin to see progress in Atlantic City or we’re going to start considering alternatives. It’s a year when we have to show some significant results,” Christie said earlier this month.
The Meadowlands is one possible location for future casino development.
Two weeks before Atlantic Club is no more
On January 13, the number of casinos in what was once the largest gambling market outside of Las Vegas will be reduced by one, when the Atlantic Club Casino Hotel closes its doors. Sixteen hundred employees will be left without work.
Earlier this month a judge approved the sale of the Atlantic Club, a property that was once among the most profitable in Atlantic City but has declined in recent years with the contraction of the city’s gambling market, to Tropicana Entertainment and Caesars Entertainment.
The pair of companies won the Atlantic Club at an auction that wrapped up before the Christmas holiday.
The Atlantic Club has been a headline generator for most of the year after it put the brakes on a deal it had struck with the world’s largest real money online poker room, PokerStars, that would have seen the Internet poker behemoth buy out the casino. The Atlantic Club terminated the purchase contract in the spring, with PokerStars then suing to keep the sale on track.
A judge ultimately ruled that the Atlantic Club was within its right to halt the sale after PokerStars was unable to secure an interim operating license from New Jersey gaming officials to run the casino, which was originally developed back in the 1980’s by casino mogul Steve Wynn. PokerStars had already paid $11 million toward a $15 million purchase price, money that the Atlantic Club was able to keep despite the deal’s failure to close.
By November, the Atlantic Club was bankrupt and heading to the auction block. Tropicana and Caesars bid $23.4 million for the soon to be shuttered casino. Tropicana will be taking the slot machines and table gaming equipment; Caesars will retain the hotel property.
Some worry other AC casinos will suffer the same fate
With the Atlantic Club soon to go bust, there are many who worry that other casino properties in Atlantic City may be heading toward a similarly bleak fate.
One casino that hangs in the balance is Revel, the newest casino in the city. Opened at a cost of $2.4 billion in the spring of 2012, Revel was bankrupt within a year of first opening its doors.
“It is very likely that this same strategy will be used to take out Trump Plaza, perhaps the Golden Nugget and maybe even the Showboat,” said former gambling publicist Wayne Schaffel, who believes that the model of bigger casinos buying and closing smaller properties may be a template repeated in Atlantic City.
“It will undoubtedly shore up the balance sheets for the remaining 8 to 11 properties, but it will also take out anywhere from 1,500 to 3,000 rooms. At the end of the day, the winners will be the few remaining casino companies. The losers will be the thousands of employees who lose their jobs; the state, which will suffer from ever lower revenue and taxes, and Atlantic City itself,” Schaffel was quoted as saying.
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