New York City Casinos A Threat To New Jersey, Northeast Gaming Markets

April 22, 2024
Executives with casinos in New Jersey are planning for the arrival of three new multibillion-dollar integrated resorts in New York City and their negative impact on an already crowded regional gaming market in the northeastern U.S.

Executives with casinos in New Jersey are planning for the arrival of three new multibillion-dollar integrated resorts in New York City and their negative impact on an already crowded regional gaming market in the northeastern U.S.

Those three downstate New York casinos are widely expected to attract foreign gamblers and table game play away from Atlantic City, making it more crucial for operators to focus on regional markets and make them more attractive to consumers.

“We see New York gaming in general clearly as a threat,” said Mark Giannantonio, president and CEO of Resorts Atlantic City casino. “But we also see it as what it stands for. It’s Manhattan. It’s New York. Clearly, it will drive gaming in the Northeast.”

Giannantonio said to some degree the pending expansion of casinos in New York City will affect all regional casinos, whether in Connecticut, Rhode Island, Massachusetts, eastern Pennsylvania, or Atlantic City.

“From my perspective as an Atlantic City operator, Atlantic City has to be prepared for this,” he said. “We have to be focused on the redevelopment of Atlantic City. Make Atlantic City an attraction for people to visit and there is a lot of work to do.”

New York is moving slowly through choosing three sites for new casinos, with regulators still preparing to respond to a series of questions from prospective applicants and a licensing decision not expected until late 2025.

Two expected bidders for the licenses that will require a $500m upfront fee on top of billions move-in development costs are MGM Resorts and Genting Group, which already operate video lottery facilities limited to slot machines in Yonkers and Queens, respectively.

Other companies to have declared an interest include Caesars Entertainment, Las Vegas Sands, Wynn Resorts, Mohegan, Bally’s Corp., the Chickasaw Nation and Greenwood Gaming.

Giannantonio said Atlantic City has a “two-year window” to prepare for New York competition by improving its infrastructure, and increasing its police presence on the boardwalk and other areas so visitors see a viable law enforcement presence.

Giannantonio was one of several panelists over the two-day East Coast Gaming Congress last week at the Hard Rock Casino in Atlantic City to remind attendees of the need to focus on the redevelopment of Atlantic City to make it more attractive to visitors.

Stacey Rowland, chair of the New York Gaming Association and general counsel with Genting Americas, said the upcoming new casinos in her state were about capturing gambling revenue currently being wagered in other states.

“Competition is a good thing,” Rowland said.

Atlantic City Mayor Marty Small assured attendees that he understood what Atlantic City was facing from New York.

“Now more than ever we know there’s a threat looming in New York gaming coming to Atlantic City,” Small said. “We understand the threat. We want to continue to work together to do things right to put Atlantic City in a prime position that no matter who builds casinos and no matter where they are, that’s coming with diversifying our options.”

Even with tens of millions invested in their properties over the last couple of years, seven of the nine casinos in Atlantic City won less money in person last year than they did before the coronavirus pandemic.

“We see the numbers,” Small said. “Would we like more in-person [visitation] with the numbers higher, absolutely. But at the same time, you can’t ignore the explosion of internet gaming and the explosion of sports betting which is vitally important.”

Small said the casino industry is important to Atlantic City for many reasons, including being the city's largest taxpayer as well as the largest employer.

Jim Allen, chairman of Hard Rock International and CEO of Seminole Gaming, also has plans for New York.

His company operates Hard Rock casino in Atlantic City but is partnering with Steve Cohen, who owns Major League Baseball’s New York Mets, on a proposed $8bn casino complex at Citi Field in the city’s Queens neighborhood.

“I think it is very important to look at the image of the town,” Allen said of Atlantic City. “If there are three mega-resorts built in downstate New York, whether it is our project, the Wynn project or Caesars … that could have a 20 percent to 30 percent impact here.”

“We have to prepare for them,” Allen added. "We have to put our differences aside because the reality is we are confident we can be successful in this building because we are committed to it and because the rest of our business is doing quite well.”

Allen stressed that Hard Rock does not want to see any of its competitor's Atlantic City casinos close. From 2014 to 2016, Atlantic City saw five casinos close with two having since reopened under new ownership.

“We don’t want to see 2,000 or 3,000 people laid off. That’s not healthy. So hopefully we as an industry and government can continue to move the ball forward.”

Tom Reeg, CEO of Caesars Entertainment, which just completed $430m in upgrades to its three Atlantic City casinos, agreed that the three new New York casinos will be a challenge.

Caesars is pursuing a license to build Caesars Palace Times Square in partnership with SL Green Realty and ROC Nation.

“I share Jim’s concerns about where this market is headed as we head into New York,” Reeg said. “We have a very strong argument to make, and we are pursuing that license with fervor.

“But right now really,” Reeg admitted, “it’s just a bunch of consultants making money for far longer than I anticipated.

“Hopefully, we’ll have an answer on that at some point in 2025 … and then we’ll be able to make our plans in terms of what’s happening there and what it means for Atlantic City and what we need to do to continue moving forward.”

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