Author: Matt Pelc | Article Posted at: March 16, 09 - 5:56 pm

Atlantic City Feels Pinch of Recession

Gambling cynics may be surprised to find out that the gambling industry is taking a hit in the world-wide recession just like any other industry.

When an area decides whether or not to allow casino gaming or an expansion of the lottery system, many critics of gaming usually point to that fact that people with little money will take their paychecks, welfare or unemployment benefits straight to the casino to try to make ends meet.

At least in Atlantic City this is not happening. Many casino and casino-based industry employees in the New Jersey gaming town have stated that it is has been nearly 20 years since the boardwalk has been so slow.

Casino revenue reports show an even harsher decline. Aggregate revenues went down 19.2 percent during February compared to February 2008. That is the steepest reduction in revenue in 30 years, when gaming was first legalized in Atlantic City.

Trump Entertainment’s three casinos in the city are all in bankruptcy while two new resorts on the drawing board by Las Vegas stalwarts MGM Mirage and Pinnacle have been abandoned due to the unavailability of credit during the credit crisis.

Pinnacle had already purchased the land for their project, a desirable beachfront location. Instead of building their planned $1.5 billion hotel-casino, they will try to find someone, anyone to dump the land off to.

Still others are confident and are moving on with their projects. Revel Entertainment is banking on the future and a revitalized economy and is proceeding with their $2 billion resort. But even with their commitment to move forward, the project has received considerable delays because of financing issues.

Some state that other factors have also contributed to the decline in revenues from legalized slots in nearby Pennsylvania to the ban on smoking inside casinos.