In case you missed it, Moody’s Investors Service published an article this week that predicts more Atlantic City casinos will likely close in the future, as more casinos are built and opened in the northeast. This continued saturation is what led to the closing of four Atlantic City casinos in 2014.
According to an Aug. 10, 2014 New York Times article, “more than half the population in the Northeast now live within 25 miles of a casino featuring video lottery, table games or slot machines.”
The Moody’s article also notes that the new casinos will create market conditions that could harm existing casinos in Philadelphia, Maryland, Rhode Island and Native American casinos in New York.
“This article confirms one of our longstanding beliefs about casino gambling – it is completely cannibalistic,” said Paul Seago, Executive Director of No Casinos. “Not only to the local businesses in these communities, but ultimately of each other. This is not the kind of economic development that we should be seeking for Florida, this is the kind we should run from.”
New entrants will pressure oversaturated casino market in Northeast US
New York, November 30, 2015 — The addition of eight new casinos slated to open in the Northeast corridor over the next three years will increase competition among operators in the already oversaturated market, but benefit gaming equipment manufacturers as the new casinos order slot machines, says Moody’s Investors Service.
It will be more difficult for the new casinos entering overcrowded markets to gain share as existing operators have been cutting costs and paying down debt in anticipation of the new supply, according to the report “Northeast Casinos Face Rising Tide of Competition.”
The new supply will hit Atlantic City particularly hard. Increasing competition from casinos in Pennsylvania, Maryland, Delaware and New York has led to the closure of four casinos in 2014, and the new entrants in these states will likely cause the number of casinos in Atlantic City to continue to shrink.
Moody’s also notes that market conditions will be difficult for existing casinos such as Sugarhouse Casino and Harrah’s Philadelphia in Pennsylvania, Maryland Live casino in Maryland, Twin River casino in Rhode Island, and the Native American casinos in New York, which have already been struggling to adapt to flat revenue growth amid new entrants.
To read the entire article on Moody’s website click here