Inside Asian Gaming

INSIDE ASIAN GAMING | August 2008 34 than 40 percent. Slot revenue is 70 percent of the Atlantic City market. The ailing economy cannot be discounted in all this. Slot win at Foxwoods in southeastern Connecticut was down about 4 percent in 2007 and down about 1.8 percent at neighboring Mohegan Sun. Consumers are dizzy from the wild ride to which they’re being treated by rampant global speculation in the price of a barrel of crude oil, and even “recession-proof” Las Vegas is feeling the pinch, and feeling it in the basics, in hotel occupancy and slot play on the Strip,obvious indicators that themass market is pulling back on a national scale. “Are gas prices having an effect? Yes. It would be silly to think they wouldn’t,” D’Ambrosio said.“It impacts the way people think. I don’t know if it’s stopping them from coming,but instead of,say,four trips amonth they’re making three trips. It gets into that convenience factor. The people going to the racinos, they may not get all the bells and whistles, but again, if it’s $30 or $40 cheaper to put gas in the car that’s a factor.” The irony is that Atlantic City, whose strengths have always been affordability and convenience—a roll or two of quarters and a comped buffet, at most just a couple of hours by car, or bus if you were too old or too poor to drive, from just about anywhere in the Northeast Corridor, the greatest concentration of humanity in the United States—not only isn’t benefiting, but the downward slide that began in 2007 is continuing well into 2008. The town has seen tough times before, needless to say, the worst of it perhaps in the late ’80s and early ’90s when the twin blows of recession and the opening of Foxwoods sent annual visitation into five successive years of declines. But in the generation that has come and gone since the casinos first arrived the market never suffered a year- over-year drop in gaming revenue—until 2007. Which is doubly ironic because in all likelihood it would have weathered the ill winds of the current economy fairly easily simply by standing still. Such is the enormity of the convenience factor, principally as it applies to the two slot warehouses in the Philadelphia suburbs. It’s interesting in regard to this to speculate on just how narrow the margin of difference may turn out to be. Visitation to Atlantic City in 2007 was down by roughly 1.2 million trips. If there is anything to the old estimate of 30 trips per visitor per year we’re talking about all of 40,000 people. Yet how much did this hypothetical 40,000 leave behind last year at Harrah’s Chester and Philadelphia Park and at the 5,200 or so VLTs at Yonkers Raceway outside New York City? More than $920 million. Atlantic City in 2007 came up $297 million short of at least matching 2006’s revenue. This amounts to slightlymore than half of what was“diverted” to Harrah’s Chester and Philadelphia Park. Back that in, then consider the impact of the