Atlantic City's Gambling Resort Fades Into Ocean
ATLANTIC CITY, N.J. (AP) -- The new year is a crucial one for Atlantic City's future, and 2014 won't start auspiciously.
This is the fourth of a five-year grace period New Jersey Gov. Chris Christie has given the seaside gambling resort to turn around its struggling fortunes before considering expanding casinos to other parts of the state -- something casino executives fear will decimate the already wobbly market.
And it will begin with the closing of one of the city's 12 casinos, the Atlantic Club Casino Hotel, which is shutting its doors on Jan. 13, the victim of a takedown in bankruptcy court. Two national gambling companies with casinos in Atlantic City, Tropicana Entertainment and Caesars Entertainment, are paying a combined $23.4 million for the business, and the right to strip it for parts and close it down.Tropicana is taking the slot machines, table games and customer lists, while Caesars is getting the property and its 801-room hotel. Neither has any desire to operate the casino in the now diminished Atlantic City market. In remarks made the day before the Atlantic Club closing was announced, Christie said 2014 is time for Atlantic City to start putting up measurable results. "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," he said. That means considering the once-unthinkable: allowing casinos at the northern New Jersey Meadowlands sports complex and possibly elsewhere in the state. Currently, state law restricts casino gambling to Atlantic City. "It's a year when we have to show some significant results," Christie said. The state legislature wants to approve a commission to study the impact of gambling at the Meadowlands, outside New York City. "Frankly, New Jersey's gaming industry in Atlantic City is at a crossroads," Tony Rodio, president of the Tropicana Casino and Resort and head of the Casino Association of New Jersey, wrote in a letter to state lawmakers earlier this month opposing the gambling expansion study. He cited private investment in non-gambling attractions like the Steel Pier, the Margaritaville restaurant and entertainment complex, and the downtown outlet shops; a five-year, $150 million casino-funded advertising and "Do AC" re-branding campaign; and the state-run tourism district focusing additional police and sanitation efforts along the Boardwalk, beach, shopping and marina areas. That progress will be jeopardized if investors think cheaper, convenience-based casinos will pop up in other places. Many casino workers and outside observers fear the Atlantic Club closing could be the first of several in a resort that analysts have long said has too many casinos to support in a shrinking northeast gambling market. Wayne Schaffel, a former Atlantic City casino publicist in the 1980s, sees more of the same on the horizon, particularly with rival companies preying on weaker competitors.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts