Why Vegas Grows as Atlantic City Declines

October 10, 2014 by  

Why Vegas Grows as Atlantic City Declines
While two of America’s biggest gambling destination cities – Atlantic City and Las Vegas – were hit badly by the worldwide recession, it would appear that only Las Vegas has been able to pick itself up and move on (Photo credit: by Nan Palmero)

Atlantic City, on the other hand, seems to be going into even further decline, with the closure of four major casinos in the city this year. The Atlantic Club Casino Hotel closed in January and the Showboat and Trump Plaza casinos closed during the summer. Then the Revel Casino announced its closure and this was a real shock as it had only opened two years ago, at a construction cost of $2.4 billion.

However, on the other side of the country, not only is Las Vegas continuing to recover from the recession; there are signs that there is new growth in the city too, with the purchase of 35 acres on the opposite side of the Strip by an Australian billionaire, who plans to have a new casino in operation by 2018.

James Packer, of Packer’s Crown Resorts, has formed a company with Andrew Pascal, former Wynn Las Vegas President, and an investment firm called Oaktree Capital Management. The company plans to build a hotel-casino on the former site of the Frontier Casino.

So why is it that the city that used to be known as America’s playground is having so much difficulty in emerging from the recession? In the UK, the online gambling market is huge, and very competitive. The presence of so many online casinos and bingo sites such as Winner, 32Red and SkyVegas means that there is very little motivation for casino gamblers to leave their homes and go to a land-based casino or bingo hall. Plus there’s a lot of free playing credit to be found online too. For example, a player signing up to Winner Bingo only needs to put in £10 of their own money in order to get £40 to play with on games across the site. Consequently, there isn’t that much of a casino-hotel culture there. But in the US, although it’s now possible to play online poker in the states of Nevada, New Jersey and Delaware, other types of online gambling are still not permitted, so generally people who want to play casino need to go to a land-based casino. Although online gambling may still not be possible in the majority of the US at the moment, it’s very likely that legislation will change and that online casino gaming will become a reality in the future. And then why would people choose to travel to Atlantic City or Las Vegas when they could play all the same casino games at home?

The big difference that is currently affecting Atlantic City is that neighbouring states like New York, Maryland and Pennsylvania have changed their gambling legislation which means that the market for casinos is now becoming too crowded. Fourteen new casinos have opened in neighbouring areas to Atlantic City since the turn of the millennium.

During the past eight years, Atlantic City revenues have fallen by almost 50%, and many stretches of the famous Atlantic City boardwalk are now empty. The monopoly on casinos that Atlantic City used to have simply isn’t there anymore and now that gamblers don’t need to travel to AC to find a casino there simply aren’t enough other reasons for them to visit.

However, there are some casinos that are still enjoying good business in AC and they’re the ones that offer more than casino games to their customers. A key example is the Borgata which, like many of the casino hotels in Las Vegas, is an integrated casino resort. If people were looking purely to gamble, they wouldn’t need to travel to Atlantic City, they could stay closer to home, but resorts like the Borgata offer more than a gambling vacation. As in the big Vegas casinos, the magic formula for success is to offer great dining experiences, great service and amazing live entertainment and shows.

It’s this that really sets the majority of big Vegas casinos apart from their less successful counterparts in Atlantic City. People want a full and rounded experience when they go to a gambling destination – not just casino but other forms of entertainment too, and that’s where Atlantic City could learn something from Vegas. The Borgata seems to have got the memo, at any rate!

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