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Sandy Blamed for Drop in Casino Revenue

Atlantic_City_NJ_nightBY BOB HOLT
NEWJERSEYNEWSROOM.COM

Hurricane Sandy is being blamed for New Jersey having the largest decline in casino revenue for 2012.

According to a survey from the American Gaming Association, gambling revenue in the U.S. rose nearly five percent for the year, taking in $37.3 billion, its highest total since 2007.

But New Jersey did not follow the trend. CBS News reports that according to the survey, Atlantic City's revenues dropped 8 percent last year to just over $3 billion. The casinos earned $5.2 billion as recently as 2006. NorthJersey.com reported that New Jersey’s casino tax revenues for 2012 sunk to $254.8 million. Money spent on gambling in Atlantic City has dropped nearly 40 percent since 2006.

Temporary closings from Hurricane Sandy is believed to have kept casino visitors away from the Jersey shore for months. Increased competition is also said to have hurt the shore casinos.

The Philadelphia Inquirer is reporting that Pennsylvania’s 11 casinos earned more than the 12 in Atlantic City, with a $3.2 billion total. The Jersey Shore spots brought in $3.1 billion. AGA president and chief executive Frank Fahrenkopf Jr. said, "Those that live in Philadelphia no longer have to drive to Atlantic City."

Atlantic City opened Revel last year, which has 1,399 rooms and cost $2.4 billion. According to MSN Money, in 2011, New Jersey provided $261 million in tax incentives through the Economic Development Authority after Revel’s original backer walked out. Revel has filed for Chapter 11 bankruptcy.

New Jersey will be starting Internet gambling this year in an attempt to turn the slide, and the Miss America Pageant will be returning to Atlantic City. Also, Revel will be allowing "canine family members up to 30 pounds" to be guests soon.

 
Comments (1)
1 Tuesday, 07 May 2013 18:29
Steven Norton
I have some issues with the positive tone of the AGA's report on the casino industry in 2012. There was good news in that 85% of our citizens approve of casino gaming now. But the Country has not recovered from the recession. We still have unacceptable unemployment levels, and if it weren't for the Fed keeping interest rates artificially low, we would be in a major recession. Gaming has grown in revenue because of new states adding casinos or slot parlors. They are keeping up with their neighbors, who were siphoning off voluntary tax dollars from their citizens. Negative perceptions, like crime and organized crime, have previously scared many states from considering casinos as a meaningful way to spur tourism, jobs, taxes and construction. Now these perceptions are better understood, having followed even family type development in communities like Orlando, with Disney, Epcot, Universal Studios and others; developing higher FBI
Crime stats than Atlantic City or Las Vegas.
The growth experienced last year was primarily due to new capacity in Ohio, Maryland, Illinois,Pennsylvania, New York and Kansas. Mature markets like Delaware and Atlantic City experienced declines in spite of new capacity in AC, with the addition of Revel. However in spite of new properties opening in the US, and revenues increasing by 5%, the casino industry still suffered from a reduction in jobs, as reported by the AGA.

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