For years, the casinos in Atlantic City showed continued growth since there was little competition to eat into the gamblers’ appetites. When the New Jersey gaming regulators reported quarterly revenue, the question was not whether the numbers were higher but exactly how high.
That condition has ended with analysts giving out their reasons why the Atlantic City allure seems to have ended.
More often than not, the principal reason has been competition. It first started with small racetracks in Delaware that added slot machines. Then slots were approved in West Virginia and more recently in New York and Pennsylvania.
On Friday, the New Jersey Casino Control Commission reported that during the month of July, the 11 casinos won $469.6 million, a decrease of 2.3% from the previous year. And, that comparison was being made with a month in 2006 when because of a budget dispute the state’s casinos were closed for three days.
For the first seven months of 2007, the casinos won $2.91 billion, down 3.7% from the corresponding period of 2006.
The only other factor cited by observers was a smoking ban imposed earlier this year.
But there was no smoking ban at Mohegan Sun in Connecticut where, with its nearby neighbor Foxwoods Resorts, the casino showed phenomenal growth for a number of years while the two properties enjoyed pretty much of a competition-free period.
However, the Indian casino recently reported that in the three months that ended on June 30, it showed a decline in profits. Net income was $72.4 million, down $3.9 million from the same period last year.
Mohegan Sun operators blamed the decline on competition, primarily from Yonkers Raceway in New York, where the Rooney Family installed some 7,000 slot machines, and Twin River Casino in Lincoln, R.I., a facility that has seen a multi-million dollar expansion since being bought by Sol Kerzner and his English partners.
The drop in business due to the added competition has caused the Mohegan tribe to reassess its $740 million planned expansion project.