My piece in the Las Vegas Business Press about the beginning of the end in Atlantic City is out:
Historians have taken the date 476 A.D. and the deposition of Romulus Augustus, the last Roman emperor, as the “official” date of the fall of the Roman Empire, even though at the time most Western Europeans were too preoccupied with daily survival to take much notice of events in the far-off capital.
When historians look back at the history of casino gaming in Atlantic City, they may decide that 2010 marks the beginning of the end of that city's reign as one of the country's leading gaming destinations, and they might focus on a single event: The decision by MGM Mirage to abandon its holdings in the city after the New Jersey Division of Gaming Enforcement found Pansy Ho, the company's partner in its MGM Grand Macau casino, “unsuitable.”
via Las Vegas Business Press :: David G. Schwartz : The beginning of the end for Atlantic City?.
I don’t think this is hyperbole. The revenue trends are showing a decline that started slightly before the recession that is more due to competition than the economic slowdown, although the recession hasn’t helped. There are real problems in Atlantic City.
Are there solutions? Yes, and they go beyond making Pacific Avenue a one-way street. As I see it, the city has to be reinvented to appeal to two groups: investors, who will buy or build new casinos and attractions, and visitors, who will fill them. These groups aren’t mutually exclusive, but they require different approaches. The average gambler doesn’t really care about how many levels of scrutiny casino vendors go through before they are licensed, but this sort of thing makes a difference behind the scenes.
It’s not impossible. The city’s been through worse, and the right forward-thinking people can help get it on the right track. The time for action, however, is now. If AC just continues to coast for a few years, it may be too late, at least for this generation.
Atlantic City’s decline has nothing to do with the decision to not recommend Pansy Ho for MGM partnership. As you correctly point out, it has to do with competition for the gambling dollar, plain and simple. The partial smoking ban has more to do with the decline than the Ho deal. And once the DGE report on Pansy comes out, MGM is going to have to be concerned about Nevada and Mississippi reconsidering their previous OK. It’s not just the Stanley connection, there’s more there. But we won’t know what until we see the report.
As for competition, it’s going to force AC to reinvent itself, and it will require the complete support of the community. So it will certainly be the turning point in AC history because there is no history of cooperation between the segments of the community. Only time will tell…
Excellent reading material. Whether everyone agrees with it or not…it took a bold thinker to decide to write something out of the ordinary. I, for one, totally enjoy writing that causes people to think more deeply to find solutions.
I was just reading on Dave McKee’s blog that Steve Wynn is going to build a casino in the Philadelphia area, which is close to Atlantic City. Atlantic City should try and entice Steve Wynn to build a casino there, they need an established and successful casino operator like Steve Wynn to come in there and build a great casino.
Short of a public apology and massive tax incentives from the state, I doubt Wynn would return to AC. In fact, the opportunity to give NJ the middle finger no doubt played some part in Wynn’s decision to jump on board the Foxwoods project.
socalduck..I am not so sure I agree. The last time AC was falling on hard times the city gave Wynn the H-Tract and the state kicked in hefty road improvement funding to entice Wynn to build in AC and it worked to a certain extent. Well Borgata got built and Wynn’s casino did not. But Steve seemed pleased and likely to come back to AC in the not so distant past. I think it all has to do with momentum this time. Competition is truly slaughtering AC and Wynn is going to go where the gamblers are. I would think more than giving his middle finger to AC, that he would be doing it to his “friend” Sheldon who has also made a significant investment in PA!
BTW, what does everyone think? Should the city strike another deal with Wynn? How about a similar H-Tract deal with Bader Field? Now that would be bold…and probably anger many residents too.
On a separate note, I think the state and local governments are showing some signs of life. I believe they are being innovative in proposing new regulatory reforms and offering tax incentives/deferrals/redevelopment plans with Revel that if proven successful can lead to future development. But talk is cheap. As everyone knows, action is needed now. I really hope it works out. I have always liked AC…past, present and future.