bottom line is they never made it a destination. it's a locals market, and when they built casinos closer to people's homes in DC, Philly, etc....

There's nothing Straub or Icahn can do about that now. It's too late. Icahn is there to skim the last $20 M of cash off the bones of the Taj. He's not there to build it up.

I have no idea what Straub and/or Icahn are going to do, but I disagree that it is too late for Atlantic City. There are still 8 casinos there, which is a higher concentration than anywhere else within at least several hundred miles. There is still the ocean, and the boardwalk, and a much improved (since the dredging by the Army Corps of Engineers greatly expanded the beaches) beach.

Entertainment options are increasing, and the Tropicana just spent a reported $50 million improving things over there. Harrah's recently completed a new convention center. When Straub reopens the Revel (under whatever name he eventually chooses) then that may well be a boost as well, especially if the talked about water park is part of the reopening.

The remaining 8 casinos are all reporting stronger earnings. That has to be a plus.

We'll see, but I'm optimistic.

Atlantic City has had many ups and downs over the past 150 years or so. It has come back before, and I believe will come back again. Sure it has some serious problems, and the city itself may well have to go through bankruptcy first. But overall - yes, I am optimistic.

Lee

I agree completely.

The fact that gaming revenue is up at the surviving properties is not enough. Total B&M gaming win in AC was down another 10% in 2014. The market still hasn't found a bottom. There's a gradual trend of fewer people coming to AC to gamble. The locals casinos are still stealing customers and that's without gaming having really expanded in NYC/North Jersey yet.

There won't be 8 casinos left in five-ten years. Taj and Resorts will almost certainly be gone. Wouldn't shock me to see it get down to the Trop, Caesar's, Harrah's, and Borgata. Those are the only sustainable properties.

Mark my words - Straub will never re-open Revel. He would be nuts to spend $500 M on the property. He's already got the property for sale.

The writing is on the wall. Someone is going to put a casino in North New Jersey at some point because they need the tax revenue too much. That will be the death knell for the worst 2-4 properties in AC.

Atlantic City may have a rebirth as something else, but it won't be as a gaming mecca.

Hi Rapini, how are you guys! The AC Grand Prix boat race is pretty cool! Multiple races through out the day with the course usually running the length of the Casino fronts. All kinds and classes of power boats, Donzi's and split hulls. Always a good turnout on the beach for the Sunday race. What you want to do though is on Saturday the day before the races, go over to the Farley Marina at The Golden Nugget. That's where they keep most of the boats on display and you can get up close and personal with the boats. If you go have fun and say hello to everyone in AC for me!!!

I don't think anyone, including Straub, knows what Straub is going to do. You may very well be right, but I think it's a mistake to declare it with such certainty.

Yes, if AC is to survive it won't be as a casino city, but as a vacation and resort city that has much to offer, including casinos.

Agree too that if AC has a bright future, it's as a multifaceted resort where gaming is one option. You could imagine Trop/Caesars/Harrahs/Borgata world working pretty well, where total gaming revenue is down for the city, but those four properties do significantly better than they do today and can make good profits, fill 3/4 of their hotels+ even in the off season, and can invest properly back in the buildings. (Edit: add Revel in too as a mixed-use casino/water-park/we as a fifth option, or replacing one of the non-Borgatas).

The question is can the rest of the city get there in terms of investment to build/convert other attractions, keeping the city services afloat (possibly through a bankruptcy), and handling the transition from a gaming town to non-gaming. The last one is tricky (not that the first two aren't...) - casinos are pretty labor intensive, and the jobs are relatively good ones in terms of compensation relative to skill level. If four casinos close, you've got thousands more employees who now need jobs, and bars & restaurants, concert venues, water parks, arcades, amusement parks etc. don't need as many employees/sqft, and their jobs don't pay $15-$20/hour + great benefits.

Here is the crux of the problem. This was obvious decades ago. Even when AC was doing good, anyone with half a brain knew that the gambling part was gonna be copied by other states sooner or later.

So this should have been planned for long in advance. The boardwalk should have been become an extravaganza, the city cleaned up, the area where the Sands used to be turned into something other than a patch of grass, etc.

But the people in charge collectively couldn't see past the next slot quarter.

Why should I believe they will ever learn?

The casinos made their money. They will pull out before they reinvest in AC. Now that NJ is seriously discussing the Meadowlands as a Hard Rock casino project reinvestment in AC is even less of a possibility.

They should have done the right thing by AC years ago but the casinos already made their money: so the changing casino landscape is not as much of an issue for them as they have already diversified their location portfolios.

IMHO, there will only be 4 casinos -- Borgata, Trop, a Ceasars property, and Revel -- by the time the dust settles.

As a former AC casino employee I want to stick up for them a little bit. The casinos made their money, but they also paid their taxes. I once saw a chart showing the annual property taxes for Caesars' four properties along with the rest of the casinos in the company's portfolio - the 4 AC ones were more than the other ~35 combined. IIRC it was in the nine figures annually for just those four. Then you've got gaming tax of 6% off of $5B in revenue a year at the peak, sot hat's another $300M for the city. Even last year that number is $150M in gaming taxes, and Guardian's deal with the casinos was $150M aggregate property taxes for all of them combined. Then you've got CRDA, luxury taxes, etc, etc.

IMO, it's not like the casino business came in and sucked the city dry without giving anything back.

Also, you do have Borgata spending $50M/year in either '12/'13, or '13/'14 to renovate their buildings. Trop is putting something like that number in. Harrah's is building a $100M meeting facility opening in a few months. Press of AC had an article this week how Bally's is putting like $3M or something into redoing/reopening the Wild Wild West.

I'm not saying the casinos weren't law abiding (pay their taxes, etc.) but the city really didn't improve and there is a lot of poverty.

That's fair. I think there's a popular (majority?) opinion that casinos didn't do anything to give back to the city and that's why it's in the straights it's in. You may not be saying this, but I think a lot of others are - read through Press of AC comments section for a few months and you'll get this pretty strongly I think. I don't know why 300-500M+ in annual state and local tax revenue from the casinos didn't leave AC in a much better situation, but imo it seems like the casinos paid their fair share.

Thread needs a reality check on revel: it's new and shiny but it was designed in an awful manor that makes it extremely expensive to operate. The cost to fix this is huge. It also has no significant legacy player base. It doesn't have total rewards or some program like that which it can use to drive player traffic.

This property is well behind Harrahs AC in terms of viability as a profitable entity. Revel is what happens when someone who knows almost nothing about casino/hotels decides to build one. It's a white elephant.

No doubt they did pay in a lot.

The real issue is no one had the vision to make AC a real destination 12 months a year for all of America.

The #1 difference between LV and AC is that LV has an infrastructure that drives traffic year-round with its airport and conventions as well as its attractions.

Agree with that. I think Vegas was a little bit luckier in that their circumstances forced them to innovate - no one was coming to LV if they didn't build a big ass airport, for instance.

I only saw/knew AC from when I got there in '10, but from what I heard from the mid '90s to mid '00s, it was absolute insanity in the city all summer long, nice and very busy in the shoulder months, and then you still had some big pops for NYE and a couple holidays in Jan/Feb, largely driven by gaming and then the ancillary entertainment that the casinos put on. For most of the year you couldn't fit many more people into the city, so expanding air or rail travel into AC never made sense because you weren't gaining much 2/3 of the year.

That said, I'm certainly not a public policy/tax/finance expert, but it is just hard to figure out how the casinos could pay billions in state & local taxes over those 10-15 years, and the city to look like it does today (or did in 2007 if you prefer). AC's not a big city, it seems to me like the tax base should have been orders of magnitude bigger than similar size towns.

AC was making money hand over fist from Philly, et al - it didn't need an airport when it could charge $200 a night for a dumpy room at Bally's in the summer. There also used to be charter flights for gamblers run from the Midwest.

And, AC used to have plenty of events - think about how many boxing events ran in AC in the late 1980's into the 1990's. It didn't need conventions when it could pack crowds in for concerts and other attractions.

I do think the Walk was a great idea, and AC need a couple more of those things. I give Caesar's credit for trying to build an attraction with its Pier, but it turned out to be a huge waste of money.

believe it or not AC does have an airport

http://www.sjta.com/acairport/

never understood why they didn't have good flights from westchester county to AC. instead, they got into the train business with that ACE train.

When you have a near monopoly for 30 years there is no competition to incentivise change (and no reason to build an infrastructure or improve it, such as the airport).

Since most of these properties are deprecated the casino owners will not think any reinvestment will yield enough ROI. So, once enough go under the remaining ones will reinvest in their own properties at that time and will make a determination then if reinvestment in the community will help their businesses.

It will be interesting to see what develops but unlikely any increase in significant gambling traffic, esp poker.

BTW, if there is bus service from NYC to the Meadowlands Hard Rock (should it be built) and they have live poker I'm certainly not heading to AC unless it's a *very* special occasion.

I've flown to it. It's not bad. There's just so few flights.

i fly to it regularly. nice airport and because they're so few flights (basically spirit plus some boutique airlines) you get through security fast.

Nothing says "high quality" like spirit airlines...

AC airport is definitely a nice convenience to have...just wished they'd fly to the west coast again like they used to; hate driving to Philly to go to Vegas. But I have several friends/family members who live in Florida and Texas, so the airport run to AC scores me major points(!)while actually only inconveniencing myself for a 15 minute drive. Win, win!

For awhile the AC airport was advertising itself in the Philly media market as an alternative to Philly International, playing up it's smaller size and how it's less time consuming and less of a hassle to use than Philly.

The same happens up here with Manchester NH airport saying they're smaller/easier than Boston. They're about an hour apart.