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All news is bad news for Atlantic City15 February 2010
ATLANTIC CITY, New Jersey -- Atlantic City gaming revenues fell 8.5 percent in January to $294.2 million, the New Jersey city's 17th straight monthly decline.
That was the good news.
In the past five weeks, Atlantic City's 11 casinos saw new competition emerge (table games in Pennsylvania and Delaware, slot machines in Maryland and New York) and two casino operators (MGM Mirage and Pinnacle Entertainment) begin planning their exit from the market.
Atlantic City's gaming revenues fell 13.2 percent in 2009, the third straight year of declining revenue and the first time in its history that casino winnings fell by double digits.
Atlantic City is like the corpse in the movie "Weekend at Bernie's." It's being carted around in an effort to fool everyone that it's still alive.
And the news gets worse.
Gov. Chris Christie, who as a candidate last summer pledged his opposition to any gambling expansion that would hurt Atlantic City, may explore adding slot machines to New Jersey's racetracks. New Jersey Senate President Steve Sweeney is pushing for a full examination of Atlantic City's casino industry with the idea of more state oversight. He also thinks there should be a limit on how many casinos one company can own.
You get the picture? Wall Street does.
"We continue to believe that not all of the 11 properties will be able to survive," Macquarie Securities gaming analyst Joel Simkins said in January after Pennsylvania approved table games.
Last week, after MGM Mirage began the process of unloading its 50 percent stake in the Borgata and Pinnacle placed its 19-acre Boardwalk site up for sale, Simkins said Atlantic City was facing "significant headwinds."
Boyd Gaming Corp., which owns the other 50 percent of the Borgata, Atlantic City's flagship resort, remains bullish on the market.
"It's challenging but our commitment to Atlantic City has not changed," said spokesman Rob Meyne.
Several steps are being taken to halt the bleeding.
A state Senate panel approved a bill that would allow sports wagering in Atlantic City casinos, but only if a federal ban on sports gambling is lifted.
Construction on Revel Entertainment Group's 3,800-room Boardwalk hotel-casino could be finished by 2011. Financing for the resort is still not done, but the company may be close to completing its construction funds.
While the Revel project will create excitement, its opening could kill some of Atlantic City's older casinos.
Remember, at the end of the movie, Bernie was still dead.
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Best of Howard Stutz