Gambling expansion puts the squeeze on Vegas

Jan 12, 2010 5:02 PM
New regional casinos will deter tourism

The wonders of CityCenter notwithstanding, Las Vegas will be feeling the ills of Atlantic City before too long.

When a spokeswoman for the New Jersey Gaming Association said last week, "Now that casinos are soon to open in Pennsylvania, residents who might have made the drive to Atlantic City won’t have to hop in their cars and drive for more than an hour."

She could have added, "Or hop on a plane and fly four or five more," meaning Vegas.

When governor Ed Rendell of Pennsylvania signed the bill last Friday, legalizing table games at Pennsylvania’s six currently operating racinos and casinos, he was taking a slice of Nevada action with his pen.

He signed "with serious misgivings," he said, lamenting the pounds of pork added to the bill in its tortuous voyage through the legislature. Speaking of those greedy grabs, he said, "That’s no way to run a railroad."

But the members of the House, in particular, took their cut of flesh as they agonized at passing it, which they did only after Rendell gave them a deadline of last Friday. If they had not done so by then, he had instructed his department heads to fire 995 employees, and place the blame on the legislators. They played it to the hilt, passing it on Thursday with pious pronouncements of answering the call of their constituents, whom they had ignored for months.

It didn’t take long for action by the tracks and casinos. Mohegan Sun at Pocono Downs, led by its activist president and CEO Bobby Soper, announced ads for 400 job openings, and Soper said passage also would result in moving forward with plans for a nine-story, 300-room hotel on the track grounds, connected to its booming racino.

Pocono led Pennsylvania in slots revenue last year, up 19%. It is located at the edge of the hard coal district in northeast Pennsylvania, at the entrance to the state’s famed Pocono mountain resort area. Hard coal or not, its racino is not some rough mining saloon. It is glossy, sophisticated and upscale, with 2,466 slots, 10 restaurants, 7 bars and 5 retail shops.

It may not be City Center, but it also is not 2,500 miles away from its customers. Its impact on Atlantic City is real and recognized, and so is the Sands casino in Bethlehem, heart of the Lehigh Valley that also includes Allentown and Easton, the tri-city complex all 100 miles or less from the Jersey shore.

To add to the threat to Las Vegas, there now is sports betting in Delaware, at the state’s three track racinos at Delaware Park, Dover Downs and Harrington Raceway. Some pundits downplayed its introduction, saying its limitations to NFL games would restrict its growth. But its proximity to Philadelphia has proved a real lure, and Pennsylvanians, New Jerseyans and New Yorkers are visiting the racinos in substantial and growing numbers.

None of those states can match this development, since Delaware is, like Nevada, one of only four states in the union – Oregon and Montana being the other two – grandfathered from federal legislation prohibiting sports betting.

All of these new gambling opportunities, relying on geography rather than grandeur, spell trouble for Vegas. The city’s round-the-clock gambling and fancy, expensive shops and breathtaking new buildings and big name shows will continue to dazzle and lure the world, as mayor Oscar Goodman contended in his usual entertaining fashion on national television last week, but the horizon has shifted.

The city no longer is alone. There are new rivals out there, and they will chip away at the base, bit by bit. They will not bring anything down, but like all competition they may force the kings to look over their kingdoms and stay alert.

Atlantic City numbers are down, deeply. It is not all because of economic conditions or weather. The boardwalk is surrounded now, and no longer impregnable. Las Vegas, to a far lesser degree, faces similar problems.

Question? Comment? E-mail me at: Stan Bergstein