A few more thoughts about Atlantic City, culled from a few
Advisers to Gov. Chris Christie have called for casino regulatory reform, a public-private Atlantic City marketing initiative and possible state intervention in city government as ways to save New Jersey’s casino industry from competition and its “failed” business model.
On Friday, Christie released 19 transition team reports containing dozens of recommendations for reducing and reforming state government. The detailed proposals include making Atlantic and Pacific avenues in Atlantic City one-way streets, accelerating Atlantic City International Airport expansion and building an Atlantic City Expressway interchange for the airport and a new aviation research facility.
Another idea mentioned, although not endorsed, is to privatize the state lottery and have it work with New Jersey racetracks, which have sought to install video-lottery terminals, which operate like slot machines. The report calls for consolidating New Jersey’s declining racing operations.
In a report critical of Atlantic City government’s handling of finances, transition team members called for an unexplained “state presence” in city government to ensure fiscal efficiency.
I believe that proposals to make Pacific Avenue one-way have been floating around since before World War II. I’ve come across them going back decades. These infrastructure issues don’t address the main problem, which is declining appeal for the city as a whole.
The report boils AC’s decline down to four issues:
1) Increased competition in “Convenience Gaming” in the 5 State mid-Atlantic region.
From 1990 to 2009, Atlantic City has gone from a “monopoly”, to a scattered
competitive marketplace of 26 existing alternatives of VLT/Slots with close to a
doubling of the supply of gaming product in recent years. Atlantic City remains the
only alternative in New Jersey, but has been surrounded by a “picket fence” of
competitive interests in surrounding states; the vast majority of which are
principally stand alone warehouses of slot machines with little non-gaming product
(no hotels and little in the way of night life, retail and food offerings). The newest
generation of increased Atlantic City competition through convenience gaming is
New York’s Aqueduct Racetrack pending 4,500 VLT facility. This needs to be
monitored.
2) Impact of the “Great Recession” on customer’s spending.
3) Partial Smoking Ban has material revenue impact (est. 10% decline).
4) Perception of Atlantic City as unsafe and unclean arising from a failure to invest in
the areas surrounding the casinos, and local government’s inability to manage this
current reality, in spite of unparalleled tax revenue per capita on a statewide peer
basis.
DRAFT TRANSITION REPORT
NEW JERSEY GAMING/SPORTS AND ENTERTAINMENT COMMITTEE
Here’s my take:
1. Competition: It’s not going away, and it was inevitable. National casino expansion really took off circa 1990, so the city’s casinos have had 20 years to prepare. One way to fight it, as this report suggests, is to follow the Las Vegas model and add unique attractions. That’s not going to be perfect–it increases dependence on fly-in and high-spending customers, who are more sensitive to economic fluctuations than moderate-spending day-trippers–but it’s a start. If you doubt that, compare the 20-year trends for Las Vegas and Reno.
2. Recession: Not much you could have done about this.
3. Smoking ban: Even a complete ban would lead to a temporary decline, but Delaware’s history suggests that the numbers will rebound within 3-4 years. If the current anti-smoking trend continues, I wouldn’t be surprised to see most American casinos limiting smoking within ten years.
4. Perception: This is an area where the city’s casinos can make a difference. The city needs a message, and needs to stick with it. I don’t think that people come to Las Vegas because it has a reputation as a particularly clean or safe place; most big cities, in fact, have issues with crime and blight. People come to Las Vegas to have fun. Can you have fun in Atlantic City? I think so, and potential visitors need to find that out.
The best thing for the people trying to restore Atlantic City to do at this point would be to take a long look at what Las Vegas has done right. Once, Las Vegas was primarily a gambling destination, with a heavy reliance on Southern California. In the past ten years, Indian casinos have cut into the Southern California market. But even with the recession, Las Vegas is in a better place now that it was in 2000–which is more than Atlantic City can say at this point. Why?
Las Vegas was able to transition into areas as disparate as business meetings and nightlife: Atlantic City should make investments in these, particularly in the meetings market, since that will boost mid-week occupancy and keep hotels full. A combination of business travelers spending more on f&b, lodging, and entertainment, supplemented by what remains of the day-tripper market, can give a mid-week base for both non-gaming and gaming revenues. Then on the weekend resorts can focus on attracting higher-end destination gamblers and travelers. The convention room rates will provide a base that will let the resorts offer better-class rooms that can make money seven days a week, not just two.
It won’t be easy–there are many negative perceptions to overcome, as well as some serious renovation and construction work–but at least it will give the city a chance.
This was interesting to read. I don’t know a thing about AC so my comments wouldn’t matter anyway.
One sentence…regarding smoking likely to be be banned inside casinos within 10 years…is probably true.
I’ve been a smoker for 12 years and a person might think I’d defend it. In truth…I think it’s a barbaric thing to do…plus it infringes on other people’s rights in a very unfair way.
I could quote (comedian) Steve Martin’s response to the question “Mind if I smoke?” “No. mind if I f*rt?”
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When I smoke at the Palms…or any other casino..I use a special procedure if I’m walking. I cup my cigarette in my had so its ‘flame’ won’t accidently poke into another person’s arm (or God forbid) a kid’s eye…in a crowded place like a casino floor or near a public food court.
Smokers and smoking are a major hazard. Even THEY realize that is a fact. The amount of fires caused by smoking are too many to list (in nightclubs, apartment houses and hotels thru the years). Much less all the other bad things about smoking.
Plus. It’s just plain wrong to do in public. As is loud talking on a cell phone.
Yesterday I had to hear a lady have a loud, profane talk with her friend while I waited in line at a mini-mart.
I know of one mini-mart that placed a sign asking that customers not talk on their phones while at the counter paying for something.
That seems like a good rule…since it causes the clerk too much confusion…and it’s a rude behavior to give more attention to a phone call than to the ‘live-human’ who is trying to do business with you.
My mother has always had a peeve about a different ‘public rudeness’. In fine-restaurants there always seems to be some guy making an ugly public sound by blowing his nose right after his meal… while other people are eating. It offends women’s sensitivities (and I’ve grown to notice and dislike it as well).
I can almost place bets that it happens twice an hour (minimum).
So. I am all in favor of the banning of smoking, loud public cell-phone-calls, and nose blowing in restaurants (especially around women). Here in Vegas and also AC.
If any smokers wish to debate this subject please don’t bother. I refuse to debate anyone who uses a ‘vested interest argument’.
In the meanwhile…until the future smoking bans take place…I encourage all casino-smokers to follow the ‘cupped-hand smoking system’ to avoid burning any innocent by-standers.
Street direction changes take decades, are usually studied to death first and then have undesired consequences that make things worse.
Unsafe and unclean? Well, I don’t know how some ill-defined state presence is going to change how the area surrounding the casinos will be treated. The casinos bring tax revenue to the state and apparently the city doesn’t feel obliged to support programs that will remove the nearby unsafe and unclean areas. Well, perhaps whatever tax money the city gets is not dependent upon removing localized blight. Or perhaps localized blight is being used as a tool. Crack houses near Reno casinos are no accident, they are a tool used to influence the casino’s revenue for ulterior purposes.
Aviation research facility? Some politician is trying to sneak in his pet project into the casino situation. Perhaps thats the problem right there. After all, people spoke of blight a few blocks away from the casinos decades ago… and nothing was done about it then. People spoke about freeway interchanges decades ago and now they want to construct one overnight and hope for a miracle?
It seems to me that the mentality of casino people who operate in Atlantic City is really old-fashioned and limited.
AC doesn’t seem to hold a candle to the Las Vegas as far as being modern and progressive. AC has a dated image…but I am beginning to seriously believe that a very dated, old school, boring, old-fashioned, uncreative and uninspired mentality also exists there as well.
I’d imagine that a board meeting there consists of nothing but executives who do nothing but shoot down any idea anyone might have. I’ve always been baffled my the type of minds that never actually create or propose an idea themselves…but merely shoot down the ideas of others.
Trying to brainstorm with people like that would be the worst punishment I could imagine.
That’s why I love living in Las Vegas. Vegas is ‘open’ to new ideas. It’s always been that way since it started 105 years ago.
Here’s a simple example of the difference. Suppose I was a member of some brain-storming group that was trying to think up new casino ideas.
A guy like me might say: “Hey. Let’s start a new trend and open a sort of gambling mall and invite certain organization or groups to take part in it. Maybe we could get a ‘Burning Man Casino’ to be one of the participants.
Now. An idea like that couldn’t survive 60 seconds in an AC brain-storming session. But here in Vegas an idea like that would likely be considered for awhile…without it being immediately squashed by un-imaginative thinkers.
In Vegas…the idea would float around and brew and eventually maybe see the light of day. Even if the idea was to fizzle-out later…Vegas mentality would still give-it-a-go….and think an idea through.
AC people wouldn’t and couldn’t even begin to concieve of something like that…let alone find a market for it. I mean…isn’t AC just a sort of place built for retired people?
With that demographic…what chance does it have for any kind of future.
And with board members that have zero progressive ideas…what hope can it ever have. Ac is dead…and it wasn’t due to the economy. AC’s chosen demographic can’t keep it alive.
IMO – IMO – IMO
Maybe just for the sake of argument I’d be happy to debate someone on the subject of ‘Can Atlantic City Ever Be Like Vegas?’.
Dr. Dave, all excellent points. How do you feel though towards “state presence” in city government to ensure fiscal efficiency? I think it is essential and worth noting. Local government in AC has been an absolute failure and is considered the “top of the heap” on a state already notorious for its corrupt politicians and unsavory characters.
There is a growing sea of voter anger in the city over property taxes, where the city budget is in excess of $200 MILLION dollars (for what I have been told) for a population of appx. 35,000 people. With that, the city looks horrific but the voters don’t seem to mind or make their voices heard on election days. Either that, or AC just truly does not have a good leadership pool to choose from.
Anyway, Long Beach, NY is a city on Long Island that has striking similarities to Atlantic City. They each have a similar population (appx. 35,000), are located on a barrier island, have a massive boardwalk, beaches, hotels etc and were both down and out in the 1970’s. Long Beach had even been a place that was long considered ripe for casino gaming in NY to lift the city out of the trenches. Today Long Beach, without casinos, is a thriving city/town with an excellent amount of high-end, middle class and affordable housing options. Businesses thrive both in the Summer and year round. Long Beach has wonderful parks, a clean beach, civic centers, annual festivals and a general pride that turned the city around without the support of casinos or bloated property taxes. The City of Long Beach’s budget is only appx. $78 million dollars a year. The similarities between the two beach towns are undisputable; however, their perceived accomplishments since the 1970’s are strikingly different.
Sorry to ramble on, but it is my belief that local government has a lot to do with that and it is imperative for the state to make a difference in AC since local government has proven that they are incapable of doing so.