2018, the 40th year of legalized casino gambling in New Jersey, was a monumental year for Atlantic City Two new casinos opened on the same day. Here’s our Atlantic City top 10…
Hard Rock Hotel and Casino and Ocean Resort Casino (now Ocean Casino Resort) replaced the defunct Trump Taj Mahal and Revel, respectively. New Jersey also became the third state in the country to offer full-scale legalized sports betting.
What could possibly top all of that excitement and continue to put Atlantic City in the spotlight in 2019? Rather than a single spectacular casino news story dominating the headlines in the Atlantic City casino industry, here is our Atlantic City top 10 newsworthy happenings to close out the final year of the past decade with an exclamation point.
1. Atlantic City casino gambling revenue eclipsed $3 billion.
As reported in my Jan. 2, 2020 article for NJ Online Casino, “Atlantic City Casino 2019 Revenue Has Topped $3 Billion,” this was the first time since 2012 that the Atlantic City casino industry reported annual gross gaming revenue of this magnitude. And it was even before the December figures would become available. In comparison, total gaming revenue in 2018 was just shy of $2.86 billion.
Here is what Casino Control Commission Chairman James T. Plousis had to say about reaching the $3 billion milestone in 2019.
“Atlantic City is on a winning streak. 2019 marked the fourth consecutive year of growth for the Atlantic City gaming market, and I believe it is poised for continued positive results in the new year.”
2. Two top casino executives expressed a dissenting view of Atlantic City.
Not every casino industry leader agrees with Plousis’ assessment, however. As reported in The Press of Atlantic City, Jim Allen, Chairman of Hard Rock International, whose company spent more than $500 million to completely renovate the former Trump Taj Mahal and reopen it as the Hard Rock Hotel and Casino, stated that he was disappointed in Atlantic City.
Allen, who climbed the Atlantic City casino corporate ladder back in the town’s heyday from the mid-1980s to the early 1990s, said that he still sees many of the same problems today. He even described the city as being in “worse shape today than it was two years ago” when Hard Rock made the commitment to open there.
Tilman Fertitta, the owner of the Golden Nugget Atlantic City, expressed the opinion last September that nine casinos are too many for Atlantic City. Fertitta worries that the Atlantic City market might be repeating the same mistake as when the town had 12 casinos, but the combined influence of outside competition and the recession ultimately led to the closure of five Atlantic City casinos in two years.
Fertitta summed up his assessment of Atlantic City as follows:
“It’s not a nine casino market, and I don’t understand why nobody realizes that. It’s a seven-casino market, and when it was seven casinos, everybody was putting money back into the properties. Now they won’t.”
3. Jim Johnson, former special counsel to Gov. Phil Murphy on the Atlantic City transition, stated his concerns regarding further casino expansion to both the State Assembly and the State Senate.
Johnson’s testimony followed his 2018 report recommending that state lawmakers and regulators consider placing a cap on the number of casino licenses. Johnson stated that taking precautionary steps such as this would prevent oversaturation and a possible repeat of the same problems that led in 2014-2016 to five casinos closing.
4. Meanwhile, Bart Blatstein, owner of the Showboat, is actively pursuing reopening a casino there, which would give Atlantic City a total of 10 casinos.
On the other hand, Bart Blatstein, who owns the Showboat, not only thinks Atlantic City is doing fine with nine casinos but 10 would be even better.
During the first 27 years of its existence (March 1987 to August 31, 2014), the Showboat was a casino hotel. Caesars Entertainment (then Harrah’s Entertainment) assumed ownership in 1998 but decided to close both the casino and the hotel in 2014 despite the operation still being profitable. Furthermore, a deed restriction, which remains in effect, prevented any new owner from opening another casino on the premises.
Initially, Stockton University purchased the property from Caesars. But its plans to use it as a satellite campus never materialized, and Stockton wound up selling the Showboat to Blatstein for $232 million in January 2016. Six months later the Showboat reopened as a stand-alone non-casino hotel, which it continues to be to date.
Initially, Blatstein expressed no intention of opening another casino at the Showboat.
But he subsequently changed his mind, and in February 2018 he applied to the NJ Division of Gaming Enforcement (DGE) for a statement of compliance permitting him to apply for a casino license.
Blatstein said that he intends to build a casino that would appeal to a younger demographic and focus on sports and esports. He was able to circumvent the deed restriction terms by virtue of his plan to build the proposed casino not inside the Showboat per se but on an adjoining 123,000 square-foot lot. On March 18, 2019, Blatstein received the preliminary green light to go ahead with his application for a license.
No specific timetable for a casino as yet
No specific timetable has been provided regarding when the new casino might open, nor is it yet a given that it will open at all. Blatstein could change his mind again, or for one reason or another, his application for a license could be denied. Here at NJ Online Casino, we will keep you posted on all important new developments in this ongoing story.
5. The other two closed casino hotels
Two other Atlantic City casino hotels that closed in 2014—the Atlantic Club and Trump Plaza–remain closed. More than five years have elapsed that these two Boardwalk eyesores have been unoccupied and unused.
Unlike the Showboat, no plans are in the works or even being entertained to reopen casinos at either of these properties. Here are the latest developments to surface in 2019.
I could write a whole article on the numerous prospective buyers and the grandiose plans they had for this idle property, but alas, none of them materialized. Finally, in October 2019, the NYC-based investment firm Colosseo Atlantic City, Inc. purchased the Atlantic Club for an undisclosed price from former owner TJM Properties with the intention of reopening it as a non-casino hotel. However, there is no further news to report at this time on what renovations, if any, are underway or have been completed so far and a projected opening date.
The still vacant Trump Plaza is even more of a concern since it is situated in the heart of the city at the center of Boardwalk, so it is one of the first buildings that visitors coming to Atlantic City off the Expressway see. Although talk has occurred for some time about tearing it down to expand the Walk shopping area, no action has been taken on the idea.
In addition, a complicated lease agreement that former owner, President Trump, had signed in the 1980s made selling the property difficult. However, in January 2019 current owner Carl Icahn purchased the deed to the property and terminated that agreement. What would make this news more encouraging, however, would be a prospective new buyer with a workable plan. Icahn seems to be content to just sit on the property and do nothing with it to make it usable.
6. Bruce Deifik, former owner and chairman of Ocean Casino Resort, died in a car accident at age 64 on April 8, 2019.
Deifik was the man credited with taking a big gamble by buying the Revel, the $2 billion colossal failure that never turned a profit in its two years of existence. He acquired the property for $229 million in January 2018 from then-owner Glenn Straub.
Deifik allowed very little time for advance preparations. But to his credit, he delivered on his promises, including partnering with William Hill to provide a state-of-the-art sportsbook. The casino didn’t even receive its operating license until June 21, a week before the promised opening date. Yet Ocean Resort Casino opened a day ahead of schedule on June 27, 2018, the same day as the Hard Rock Hotel and Casino.
On the following day, the temporary sportsbook opened for business, making it the second one to open in Atlantic City. Two months later, in time for the 2018 football season, the enhancements were complete, and Atlantic City’s first permanent world-class sportsbook was up and running on the premises.
Unfortunately, there was much that needed fixing otherwise at this casino. But it wouldn’t happen until later, and Deifik only lived long enough in 2019 to see the start of his dream become reality.
7. After a rough first seven months, Ocean Casino Resort has finally turned the corner.
Initially, the new property, then called Ocean Resort Casino, struggled. After a loss of more than $270 million over the first seven months, its future looked bleak. However, a name change to Ocean Casino Resort and a new owner, Luxor Capital Group starting in January 2019 saved the day.
Luxor Capital Group, a NYC-based hedge fund, invested $70 million on the property. $50 million of that money went towards paying outstanding debts, while the remaining $20 million went towards property enhancements. The improvements included new restaurants and special dining deals, a greatly expanded top quality entertainment program, new elevators providing direct access between guest rooms and the casino, a plethora of special promotions, and a new WOW Player’s Rewards program. Customers noticed the changes and have responded enthusiastically. This facility that was once on life support now attracts large numbers of new and repeat customers year-round.
The figures speak for themselves. In the third quarter of 2019 (July, August, and September), Ocean Casino Resort reported a gross operating profit of $10.27 million. It marked the first profitable quarter in this Atlantic City property’s history.
8. A possible merger of Caesars Entertainment and Eldorado Resorts
In July 2019, the Reno-based company Eldorado Resorts, Inc., which owns the Tropicana Atlantic City, announced its intention to spend $17.3 billion in a cash and bond deal to acquire the casino gambling giant Caesars Entertainment Corporation. Shareholders at both companies approved the deal in November.
Assuming federal and state regulators also give their stamp of approval, this merger would become the largest in the US gambling industry. Nearly 60 properties in the US, including four of the nine Atlantic City casinos–Tropicana, Caesars, Bally’s, and Harrah’s–would all have the same owner. They would all operate under the Caesars name.
State regulators have expressed concern that the merger could create “undue economic concentration” with regard to the Atlantic City casinos. So it remains to be seen if the proposed merger of Caesars Entertainment and Eldorado Resorts ultimately goes through.
9. New Jersey is challenging Nevada for US sports betting supremacy.
New Jersey was steadfast in its determination to do whatever it took to get the ban on sports betting outside of Nevada lifted. It led the effort that finally resulted in the Supreme Court overturning the Professional and Amateur Sports Protection Act (PASPA) on May 14, 2018.
That historic decision gave each individual state the power to decide if it wanted to legalize sports betting and if so, to enact the necessary legislation. New Jersey acted very quickly. On June 14, 2018, its first two licensed sportsbooks–one at the Borgata Hotel Casino & Spa another at Monmouth Park—opened for business.
No other state comes close to New Jersey in the number of online and mobile sportsbooks.
As of this writing, the total number of places to bet on sports legally in New Jersey includes 10 retail sportsbooks (11 separately counting Moneyline, the second sportsbook at the Borgata) and 17 more for online and mobile betting. No other state, including Nevada, comes close to offering anywhere near that number of online and mobile sports betting options.
From the time when NJ legalized sports betting was introduced through November 2019, NJ gamblers have placed more than $5 billion in legal sports bets.
NJ can draw on a much bigger population of sports bettors than Nevada.
Dustin Gouker, the lead analyst for PlayNJ.com, attributes the phenomenal growth of NJ sports betting largely to the unavailability of legalized sports betting in NYC. Anyone in NYC age 21 or older with a smartphone or tablet who so desires can get in his or her car, cross the state line into New Jersey in minutes, and place a sports bet legally.
Furthermore, the bulk of the population of existing and potential NJ sports bettors is not transient like it is in Nevada. According to Chris Grove, managing director at Eilers & Krecjik Gaming, because NJ sportsbooks can attract a much larger segment of the population, overtaking Nevada as the No. 1 state for legalized sports betting is “inevitable.”
10. NJ online casino gaming also continues to grow.
2019 has proven by far to be the biggest year yet in NJ online casino gaming. This option has existed in the state since 2013.
Eric Ramsey, an online gaming analyst for PlayNJ.com, made the following remarks about the phenomenal growth of NJ online casino gambling evidenced in the past year.
“Six years in, and it’s clear that online casinos have been a win across the board in New Jersey. Not only do online casinos continue to increase revenue at a breathtaking pace; they have built a symbiotic relationship with online sports betting. Online sportsbooks and casinos are helping to fuel each other’s growth.”