Analysts are questioning whether all 12 of Atlantic City’s casinos will end up surviving Hurricane Sandy, even though their buildings were largely spared from most of the storm’s wrath.
The casino industry was already in trouble in Atlantic City long before the storm hit, because of increasing competition from casinos in neighboring states and a declining economy, reports
the Bergen County Record. But when Sandy came ashore, the casinos were forced to close for five to seven days, and they lost millions of dollars.
Even though the casinos have re-opened, gamblers aren’t yet flocking back. Initial reports of damages to the famous Atlantic City boardwalk said it was far more damaged than it really was, which may have kept gamblers away, and much of the customer base is busy rebuilding after the storm and does not have the money to spend gambling.
Joseph Weinert, senior vice president of Spectrum Gaming Group near Atlantic City, noted the gambling market is now down 40 percent from its peak levels, but the city still has the same number of casinos. And while some properties have a margin for error, others won’t be able to last and he would not be surprised to see at least one casino close this coming year.
Atlantic City’s casino revenues have dropped during each of the past six years, from $5.2 billion in 2006 to $3.3 billion in 2011, and the hurricane just made matters worse.
Moody’s Investors Service released a pessimistic report the week after Sandy blew through, predicting Atlantic City casinos would be among the companies hardest hit. Moody’s said that earnings could drop by 25 percent over the next two quarters.
The casino losses will also be felt statewide. Officials said decreased tax revenues will dampen Republican Gov. Chris Christie’s plans for a state tax cut.
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