A Fairleigh Dickenson University PublicMind poll released Monday shows that most New Jerseyans would prefer to gamble in Atlantic City, instead of possible new destinations in the state of New York. The poll showed that 57% of New Jersey residents would prefer to stay in-state when gambling, as opposed to 12% who would prefer gambling junkets to New York casinos.
Why the Poll Is Bad News
The numbers would appear to be positive at first glance. Gaming analysts say the potential 12% loss could present serious troubles for the gaming industry of New Jersey, though. Dan Cassino, a political scientist at Fairleigh Dickinson, said, "Atlantic City casinos have to be happy that they're not facing wholesale defection. But even the loss of 12 percent of their customers, on top of what they've already lost, could be devastating."
While the poll only measures gamblers from New Jersey, the drop-off might be more significant than 12%. Out-of-state gamblers would be less likely to have brand loyalty to New Jersey casinos than people from the Garden State. Also, the poll does not measure how many New Yorkers would stop going to Atlantic City, which is likely to be significant. Population growth is not enough to account for the decline in attendance losing the New York market might cause, so the numbers remain troubling, despite the relative good news the Fairleigh Dickensen poll offers.
Decline since 2006
In 2006, Atlantic City revenues stood at an all-time high of $5.2 billion. In 2013, the numbers have sank to a 20-year low of $2.86 billion. That represents a loss of almost 50% of the city's gaming revenues in a 7-year span.
People might read the numbers and attribute the decline to the economic recession which gripped America in 2008 and 2009. From studying the trajectory, it's obvious that the decline began a full two years before the onset of the recession.
Economic Recession Also Hurt
It is true that the economic downturn caused high stakes gamblers to be more sparing with their cash. The middle class was hard hit, so the mass market land-based gamblers also stopped appearing in pre-recession numbers. Still, it's obvious that other factors are at play.
Too Much Competition
Market saturation is a major cause of the decline. In the mid-2000's, Pennsylvania passed laws which allowed their horse racing venues to have slot machines. The gaming machines provided Pennsylvania gamblers with the opportunity to stay home and still play casino games. While players of games like poker, blackjack, baccarat, craps, and roulette are more likely to continue visiting Atlantic City casinos, the slots players are more likely to stay in-state than they were 10 years ago.
Since the inception of new laws, that has presented major issues for New Jersey casinos. Slot machines account for 60% to 70% of the revenues of a typical modern casino. That means 60% to 70% of the revenue stream which once came from Pennsylvania might be affected. It's true that many gamblers prefer getting away from their everyday life for a weekend holiday out-of-state, but many others enjoy the convenience of racino gambling.
New York Casino Gambling
The state of New York already has 5 Native American casinos and 9 racetracks with lottery terminals, which are akin to slot machines. Last spring, New Yorkers approved a statewide referendum for adding 4 more land-based casinos. These casinos are meant for economically-challenged parts of the state, and the city of New York is to receive no casino for at least 7 years.
Despite those stipulations, the city of Woodbury in Orange County, New York appears likely to be the home of one casino operation. If so, then the New Yorkers and New York tourists would be more likely to travel to the Woodbury casino, which is only 50 miles from Manhattan. Under those circumstances, Atlantic City is certain to face a bleaker marketing outlook than ever before.
