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Atlantic City sees small piece of good news

3 January 2011

ATLANTIC CITY, New Jersey -- In the final days of 2010, Atlantic City casino operators received a smidgen of good news.

Pennsylvania lawmakers want to take a casino license designated for Philadelphia and transfer it to another part of the state.

The move would eliminate competition from one of Atlantic City's top feeder markets, located about an hour's drive northwest of the Boardwalk.

In reality, the troubled casino project has little chance of being completed. Operators such as Wynn Resorts Ltd. agreed to run the casino, but backed away. The project has been delayed for four years because local backers can't come up with financing.

Caesars Entertainment Corp. dropped out of the project in December after state gaming authorities revoked the local developer's casino license.

Now, the project may move to a location where it might succeed.

You won't hear protests from Atlantic City, where casino operators suffered through their 27th straight monthly gaming revenue decline in November.

The market has hit revenue levels last seen in the late 1990s. But there is optimism.

In December, gaming industry veteran Dennis Gomes bought the city's oldest casino, Resorts Atlantic City, for $31.5 million. Gomes is remodeling the casino with a Roaring '20s theme featured in the hit HBO television series "Boardwalk Empire."

Meanwhile, New Jersey Gov. Chris Christie is the most vocal proponent for rescuing struggling Atlantic City.

Before Christmas, state lawmakers gave initial approval for legislative changes that would allow for Christie's proposed state takeover of Atlantic City's tourism sector.

Removing Philadelphia as gaming competition helps the cause.

Downtown Philadelphia has one casino, SugarHouse, which opened in September. The casino's 1,600 slot machines and 40 table games produced $29 million in gaming revenues during its initial three months.

The Parx Racetrack Casino is located about 30 minutes north of downtown Philadelphia in Bensalem. Harrah's Chester Racetrack and Casino is about 30 minutes to the south.

One lawmaker told the Philadelphia Inquirer the city had reached a casino saturation point.

All three casinos lack hotel rooms, an aspect not lost on Boyd Gaming Corp. Chief Executive Officer Keith Smith.

Last summer, Smith said casinos in Philadelphia -- or in other markets competing directly with Atlantic City -- can't rival resorts like Boyd's Borgata unless they offer guests luxury hotel rooms.

There is no question Atlantic City needs help. Ironically, a competing state might provide the assistance.