Two new casinos proposed for northern New Jersey near New York City could either save, or destroy, Atlantic City.
Speaking at the East Coast Gaming Congress and iGaming Institute, proponents praised the proposed casinos as the last, best chance to save Atlantic City, because they would send $200 million a year -- for a time -- to the struggling seaside resort.
But Atlantic City casino officials said the new in-state competition could cause three to five of the surviving eight casinos to close.
“Mark it down in your pads today: It’s going to happen,” Resorts Casino Hotel president Mark Giannantonio said.
He said adding casinos on New York City’s doorstep will force New York State to add its own casinos in Manhattan, or nearby.
“The second these two new casinos open in north Jersey, New York City will retaliate violently,” he said.
New Jersey voters will decide in November whether to authorize casinos in the northern part of the state. Locations are not specified, but the leading contenders are at the Meadowlands Racetrack in East Rutherford, home to the NFL’s New York Jets and Giants, and in Jersey City, where Reebok magnate Paul Fireman proposes a casino resort worth about $5 billion.
Fireman said his project is about luring tourists from New York City, not Atlantic City.
“My intention is 40 to 50 percent of our customers will come by water” across the Hudson River, he said. “We intend to take the money out of New York instead of New York taking money out of New Jersey.”
Fireman proposes a 60- to-80-story hotel tower and nine restaurants adjacent to a golf course in the shadow of the New York skyline.
Analysts say the proposed new casinos could be among the most successful in the nation -- at least until one or more open in New York City. Opponents fear the new north Jersey casinos will kill much of what is left of Atlantic City.
“We are in an oversaturated market, and the way we’re going to help Atlantic City is to build another casino to compete with it?” asked state Assemblyman Chris Brown, an Atlantic City-area Republican.
Meadowlands Racetrack owner Jeff Gural scoffed at opponents’ predictions of massive Atlantic City casino closures.
“The people that do those studies are the same ones who decided it would be a good idea to open Revel,” he said referring to Atlantic City’s most spectacular casino failure. The $2.4 billion Revel resort closed after about two years, never having turned a profit.
Gural also said the current proposal for north Jersey casinos is Atlantic City’s best bet to help itself through the casino revenue the northern casinos would send.
Gural said if this fall’s referendum fails, a new one will likely be proposed in two years, but without aid being diverted to Atlantic City.
Wall Street analysts also voiced concern about the impact of new in-state casinos on Atlantic City. Andrew Zarnett, managing director of Deutsche Bank Securities, predicted “some” of the weaker casinos could close, but didn’t which ones, or how many.
He said Atlantic City should “let the north Jersey casinos go forward and take that tax revenue and use those revenues to rebuild the city. Maybe Paul Fireman and Gural are right.”
Eric Green Sr., managing director of Penn Capital Management, said his company will not invest in Atlantic City right now, knowing that north Jersey casinos are a possibility.
“I’m pessimistic about what would happen to Atlantic City if those new casinos get” approved, he said.