Atlantic City’s Newest Woe: Casino Values Decline
It seems that every month brings a new set of woes for Atlantic City. Revenue there has declined there every single year since peaking back in 2006, largely owing to ever-increasing competition for gamblers and their spare dollars, and now the casinos have a new concern – the declining value of their properties.
The Wall Street Journal is reporting that the dozen land-based casinos in the city want their taxes adjusted in accordance with the reality of their current values, which the paper says totals up to a drop measured in the billions of dollars.
City must refund some properties for overpayments
Atlantic City, which in addition to its economic woes still finds itself recovering from Hurricane Sandy, a storm that battered the coastlines of New Jersey and New York in October of 2012, now must issue refunds to casinos for tax overpayments, says the WSJ.
In a case decided last month, Atlantic City must fork over about $50 million to the Borgata for tax overpayments in the years 2009 and 2010. That number comprises a staggering one fifth of the city’s entire operating budget.
Said former Atlantic City Mayor and now New Jersey State Senator Jim Whelan, “There is no one single silver bullet that is going to solve this problem. The value of the casinos is down. That’s the reality.”
The Trump Taj Mahal, the Atlantic Club Casino Hotel, the Golden Nugget, and other properties in Atlantic City have already, or plan to, dispute tax bills with the city.
Countdown to regulated iGaming launch now stands at three weeks
Atlantic City has been particularly affected by the proliferation of land-based casinos on the East coast of the United States.
Pennsylvania has been especially successful at luring casino patrons to its newer casino properties, with casinos in Philadelphia – only about an hour’s drive from Atlantic City – proving to be a big draw. In 2012, Pennsylvania was able to usurp from Atlantic City the title of the second-largest gambling market in the United States.
With more casinos in the works for Pennsylvania – as well as gambling expansion occurring in Maryland, Delaware, and other Eastern states – Atlantic City has set its sights on online wagering. In February, Republican Governor and potential 2016 presidential candidate Chris Christie signed the state’s iGaming bill into law, in large part to offer a new source of revenue for Atlantic City’s faltering casino industry.
Real money online wagering web sites are set to soft launch in the Garden State on November 21, with invited players only being able to access the games. A full launch is scheduled for November 26 at 9 a.m. local time.
Gaming regulators and casino operators have pinned their hopes to the start of real money online wagering in New Jersey, with high estimates putting the annual revenue potential at $1 billion.
In New Jersey, a full suite of games will be on offer in addition to online poker. Players will need to be over the legal age of 21 and must be physically located within the borders of New Jersey when accessing real money wagering sites, with age and location to be verified in part by using cell phone location data.