From the time its first legal casino opened in 1978, until the early 1990s, Atlantic City was really the only place people could gamble in the Northeast.
State lawmakers with slot machine tax revenue dollar signs in their eyes started developing a more liberal attitude towards gambling in the 90s. Racetracks around the region soon became Racinos, with real money slot machines and electronic table games. Plus, a Native American and commercial casino construction boom that started around the same time has continued to this day.
New Jersey isn’t the only place to gamble anymore. In fact, the state’s casino industry revenues aren’t even the largest in the region anymore. They’ve been passed by Pennsylvania and the more than $3 billion that state’s casinos pull in annually.
So many casinos have been built across the Northeast, market saturation looks like its right around the corner.
In fact, two revamped gambling operations are now set to reopen in Atlantic City in 2018. Plus, two billion-dollar commercial resort casinos are getting ready to launch in Massachusetts and New York this year. As a result, the Northeast casino industry is rapidly approaching its tipping point.
Will the Northeast run out of gamblers?
The question is: Will the casino industry stop building new gambling facilities in the northeastern US before it runs out of gamblers to fill them?
The answer is apparently no. Construction of a new sports-arena area casino in Philadelphia is underway. Plus, Pennsylvania appears poised to green light up to ten new mini casinos. All this with the first signs of saturation already presenting themselves in the Empire State, where three newly built commercial casinos have failed to live up to lofty revenue expectations.
The Tioga Downs Racino in Nichols, NY became a full-service casino in December 2016. Operators said they expected to pull in $103 million in revenue in year one. It now appears Tioga Downs will end up $30 million short of that mark.
Del Lago Resort & Casino in Tyre, NY opened in February 2017 having projected revenues of $263 million its first year. Del Lago looks like it will end up about $100 million short of that.
Finally, Rivers Casino & Resort in Schenectady, NY also opened in February. Operators projected $222 million in revenues during its inaugural year. Now they’re saying they’ll miss that by as much as $80 million.
A coming increase in competition isn’t likely to improve things either.
Casino competition is only increasing
A fourth new commercial casino property is just wrapping up construction in upstate New York. The $1.2 billion Resorts World Catskills is scheduled to open in March 2018.
All signs point to this property having a tough time grabbing a real share of the local gambling market. Particularly since its nearest competitors have had such a tough time doing so. Plus, the Catskills is truly a seasonal resort area that only draws visitors for four months of the year, at best.
Atlantic City draws its customer base from pretty much the same pool of Northeastern US gamblers. Its casino offering is expanding this year as well. Hard Rock International is giving the now-defunct Trump Taj Mahal a $500 million face lift, and will reopen it as the Hard Rock Hotel & Casino Atlantic City in the summer of 2018.
Plus, a developer recently purchased the failed former Revel Casino Hotel in Atlantic City for $200 million. It is being re-branded as the Ocean Resort Casino with plans to open this summer as well.
The $960 million MGM Springfield is expected to open in Massachusetts in September 2018. It will likely keep gamblers in New England out of New York, New Jersey, and Pennsylvania.
As a result of all this, the question of where these new Northeast casinos, and the existing ones, are going find gamblers to fill them has become a real concern. One that opening more new casinos and rebuilding old ones is only going to exacerbate.