Atlantic City casinos are missing the bus

December 04, 2007 7:27 AM
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Bus-riding day-trippers have always been a staple for Atlantic City casinos, but the number of people making the trip to Atlantic City is dropping with the advent of gambling in Pennsylvania.

Jo Jo’s, one of several local bus companies that run regular charters to Atlantic City, has seen a 40 percent decrease in its Atlantic City business this holiday season, a decline that Nicole Olivieri, 35, the company’s tour and travel manager, attributes not only to the start of gambling in Pennsylvania but to a shaky economy, high gas prices and the arrival of winter weather.

The Atlantic City buses make up about 15 percent of the company’s business and, while there is a traditional drop-off over the holidays, it’s usually about 20 percent or roughly half of what it’s been this year, according to company officials.

During peak season, Jo Jo’s runs a bus trip seven days a week, carrying from 40 to 56 people, the maximum capacity. Over the winter, it generally falls to about 25 passengers a trip. This year, the company has maintained its level of 25 people a trip, but it’s had to cancel up to four trips a week at times to New Jersey’s gambling Mecca.

Other local bus companies report similar drop-offs, although not necessarily for the same reason.

Rainbow Tours has stopped its daily bus service to Atlantic City, but manager Nancy Gonglieski attributes the reduction solely to the holiday season and people looking to save their money. Parrish Transportation Co. also discontinued its daily service.

The pinch is definitely being felt in Atlantic City.

For the first time since the casinos opened in 1978, gaming revenues declined from the previous year. In October, slot machines alone in Atlantic City’s 11 casinos generated $270.3 million, a 12.6 percent decrease from the same time last year. As of the end of September, there was almost $35 billion wagered this year on Atlantic City’s 35,897 slot machines.

"The decline in game revenue is principally a result of new competition in casinos in Pennsylvania and New York, and also the partial smoking ban," said Daniel Heneghan, the public information officer for the New Jersey Casino Control Commission.

As of Nov. 25, the latest date for which state reports were available last week, Pennsylvania’s gaming industry had generated about $6.1 billion in wagers for the 2007-08 fiscal year to that point.

The impact of Pennsylvania casinos has also been felt in Connecticut. In head-to-head competition, wagers at Mohegan Sun dropped about 20 percent, or about $8 million a week.

Companies in Atlantic City have been preparing for the new competition for years, and there are plans to have more shopping, dining and entertainment to offer something that the Pennsylvania casinos cannot, Heneghan said.

And while there has been a dip in revenue, some companies, including Revel Entertainment, Pinnacle Entertainment and MGM Mirage, are planning to invest up to $10 billion to add towers to existing hotels and build new casinos in the next five years.

"People wouldn’t be doing that if they didn’t have confidence in the market," he added. "Are there rough spots when new competition arrives? Yes," he said adding that as the Atlantic City slot machines lose revenue, the casinos will replace them with different games that are more popular, a common trend, because many successful casinos offer a good mix of games.

Also, since mid-October, the Atlantic City Convention and Visitors Authority has spent $300,000 on advertising on Comcast cable networks and newspapers that reach as far north as Scranton and as far west as Harrisburg, said Jeffrey S. Vasser, the authority’s executive director.

They plan on spending just as much, if not more, next year and hope to pool their resources with the casinos, he said.