Opinion

Opinion: America's gaming industry reaches a saturation point

Thursday, September 25, 2014

The Revel Casino Hotel in Atlantic City, New Jersey, closed earlier this month. Photo from Facebook

As commercial casinos close and tribes in some states deal with declining revenues, writer argues that certain gaming markets have already become saturated:

One-third of Atlantic City’s casinos have closed this year. Simultaneously, new casinos are under construction or on the drawing board in surrounding states. So how many casinos are too many? More pressingly, has the industry reached the saturation point?
Answer: By one standard, saturation is already here. Losing four casinos is a clear indicator that at least one major casino market is tapering. But it’s not the only one. In 2007, 20 states had commercial casinos; of those, 11 (including Nevada) have seen net gaming revenue declines since that year.
Casinos, it seems, aren’t such a sure bet. Don’t say that in Baltimore, though. Caesars Entertainment, in partnership with Rock Gaming, opened a Horseshoe casino there last month. In six days, it brought in $5.7 million. If it sustains that pace, it will clear well over $300 million in gaming win in its first year of operation, despite the already-thriving Maryland Live! Casino only 12 miles away. With another casino under development in the Old Line State—MGM Resorts’ $925 million resort at National Harbor—at least one other major player is betting that there is even more room for growth.
New York apparently sees potential upside, too: In April, 22 developers paid $1 million each for a chance to win one of the state’s four new casino licenses that are up for grabs; the field is now down to 16 and remains hotly contested.

Get the Story:
David G. Schwartz: For the Gaming Industry, How Much Is Too Much? (Vegas Seven 9/23)

Also Today:
Residents Battle for Casinos (The Wall Street Journal 9/24)