Inside Asian Gaming

inside asian gaming June 2016 44 Atlantic City fears “three to five” more casino closures Atlantic City officials fear as many as five of the city’s eight remaining casinos could be forced to close if two new integrated resorts proposed for New Jersey are given the green light. Speaking at the recent East Coast Gaming Congress and iGaming Institute at Harrah’s Waterfront Conference Center, opponents of the New Jersey casinos – including President of Atlantic City’s Resorts Casino Hotel Mark Giannantonio – said the extra competition would be the final nail in the coffin for the financially stricken town. “Our findings are quite clear – three to five casinos will close,” Giannantonio said, referencing an economic impact study commissioned by Resorts. “The fallout of those three to five casinos will be, potentially, 23,000 job losses. Foreclosures will double, unemployment will double. I can go on withmany, many more metrics.” Giannantonio received support from Atlantic City area Assemblyman Chris Brown, who asked, “We are in an oversaturated market and the way we’re going to help Atlantic City is to build another casino to compete with it?” But not everyone agrees. The owner of Meadowlands racetrack – one of the possible sites for a New Jersey resort – Jeff Gural said the proposed developments would actually prove the savior under a plan to have the New Jersey casinos send US$200 million a year in taxes Atlantic City’s way. He also slammed Giannantonio’s economic impact study, stating, “The people that do those studies are the same ones who decided it would be a good idea to open Revel.” The US$2.4 billion Revel Atlantic City was open for less than three years before going bankrupt and closing in 2014. New Jersey will go to the polls in November to decide whether to allow the new casinos. While Atlantic City waits anxiously on the outcome of that decision, New Jersey Governer Chris Christie has taken matters into his own hands by finally signing legislation aimed at helping the former gaming hub avoid bankruptcy and implement a recovery plan. The legislation will see the city receive a loan from the state as well as regular tax payments from casinos amounting to US$120 million in the first year and rising. However it must work quickly to create a balanced budget for 2017 and a five year recovery plan or risk being taken over by the state should they fail to make the necessary spending cuts. INTERNATIONAL BRIEFS Nevada revenues down in April but hopes remain high Nevada saw its April 2016 gaming revenue fall by more than 2% from 12 months earlier off the back of significant falls across Las Vegas. North Las Vegas fell by a whopping 14.4% to US$20 million and Downtown Las Vegas by 13.5% to US$42.9 million, while the Strip was down 1.5% to US$491.2 million. However, overall results may not be as bad as those figures South African casino giants go to war over Cape Town South African casino giants Sun International and Tsogo Sun are set for a courtroom battle over a proposed second casino license for Cape Town. The proposed second license has been discussed for the past five years as the provincial government looks for ways to boost its revenue base, but Tsogo Sun is now looking to make it a reality after announcing they had commenced court action to push the concept along. Under their plan, Tsogo Sun would relocate one of their three casinos in Western Cape to South Africa’s third most populous city. However, Sun International quickly responded to the news by launching court action of its own aimed at preventing such a move. Sun International operates Cape Town’s only current casino, GrandWest Casino in Goodwood, which rakes in R2.2 billion (US$145 million) in revenues annually. The company also operates one casino, Golden Valley, in Western Cape. Sun International is arguing that a second casino would dilute the market rather than generate greater revenue with a large proportion of the new property’s customer base sucked away from GrandWest. Tsogo Sun, who recently purchased a 20 percent stake in both GrandWest and Golden Valley, disputes that claim. “I don’t think the provincial authorities want to kill the GrandWest tax base,” Tsogo Sun CEO Marcel von Aulock said. “Tsogo firmly believes there is an untapped casino market in Cape Town.” Von Aulock insisted the court action was aimed primarily at speeding up the government process, which has been described as “glacier slow.” “It is still unclear what the implications are for the operator of a second casino licence in Cape Town and how many billions of rand might need to be spent, but we do expect a regulatory movement soon,” he said.