- Ohio university quiz implies atheists are naturally smarter than Christians
- Rep. Henry Cuellar on border crisis: ‘Playing defense on the one-yard line’
- Activists vow to occupy fast-food restaurants to get higher pay
- Rep. Luis Gutierrez: Senate Dems wary of immigration politics
- Summer camp for 1 percenters: Sushi, limos and shopping at FAO Schwarz
- Colorado gun crackdown law found to be built on faulty data
- Hank Aaron steps to fundraising plate for Democrat Michelle Nunn
- ISIL terrorists blow up burial site of Jonah, vow more of same
- Impeach Obama, say 35 percent in new poll
- Taliban yank 14 Shiites off bus, bind and shoot them on Afghan road
Analysts: Atlantic City’s future has fewer casinos
Question of the Day
A panel of analysts speaking at a regional gambling conference Tuesday in Atlantic City said a market that has already lost one casino this year still has too many.
Adam Rosenberg, a managing director with Goldman Sachs, said “reducing capacity” is already underway, which he considers positive.
Srihari Rajagopalan, a debt analyst with UBS, agreed.
“You are seeing the market right-size, which is a positive,” Rajagopalan said. “There are unprofitable casinos shutting down.”
Earlier this month, the CEO of Caesars Entertainment, which owns four casinos here, made the same point. But Gary Loveman did not say whether he expects to sell or close one of his Atlantic City properties or engage in another Atlantic Club-style takedown of someone else’s property. Caesars and Tropicana bought the Atlantic Club out of bankruptcy, divvied up its assets and closed it on Jan. 13.
Several analysts listed Showboat and Trump Plaza among the most vulnerable of Atlantic City’s 11 remaining casinos.
“My advice to someone who’s thinking about taking on one of these properties, that thinks they can build a better mousetrap is: Don’t do it,” said Joel Simkins, an analyst with Credit Suisse Securities. “It’s very, very difficult.”
The analysts also say they don’t expect Revel to sell for anything close to the $2.4 billion it cost to build. Several say even $300 million might be too high for the city’s newest casino, which continues to lose money.
Drew Goldman, a managing director with Deutsche Bank, said Revel is losing $50 million to $80 million a year.
“If someone said they were going to shut down three casinos in Atlantic City, Revel’s share would increase. But in lieu of that happening, I think it’s very tough.”
The panel at the East Coast Gaming Congress also says a planned casino in Orange County, New York, will badly hurt Atlantic City, with Goldman predicting it would be disastrous for the seaside resort city.
“I think about how close that is to New York City and northern New Jersey, which is a very big source of customers for Atlantic City,” he said. “It is 15 to 20 minutes for people in Bergen County, maybe 30 minutes for people in Essex County.”
Timothy Wilmott, president of Penn National Gaming, is competing for that New York license.
“That’s going to have a dampening effect on Atlantic City,” he acknowledged.
TWT Video Picks
Second- and third-stringers eye 2016 if front-runner stumbles
- Michelle Obama says money in politics is bad, asks donors for 'big, fat check'
- Presidents of Honduras, Guatemala blame U.S. for border children crisis
- 'We're coming for you, Barack Obama': Top U.S. official discloses threat from ISIL terrorists
- EDITORIAL: Detroit's water 'spigot bigots'
- NAPOLITANO: What if our democracy is a fraud?
- Hamas rejects Kerry's call for cease-fire; Fears grow others could join fight against Israel
- Crime-ridden U.S. cities differ on ways to fight gun violence
- Obama takes aim at 'corporate deserters'
- Let it roll: D.C. Council hits Las Vegas on taxpayer's dime, leaves $14,000 tab
- Obama orders Pentagon advisers to Ukraine
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors
20 gadgets that changed the world
Fighting in Iraq