While there is great scope for the casino gaming market in the U.S, gaming companies are facing a number of challenges that could potentially put them out of business. Nowhere is this more evident that in the garden state of New Jersey. The gaming market appears to be saturated and a number of establishments have to wind up operations.
Atlantic City has been the most affected as one quarter of the city’s casinos that were open during the start of 2014 will now have to shut down. One of these establishments is the popular Trump Taj Mahal that filed for bankruptcy on the 10th of September and is scheduled to close operations in November 2014. Since 2007, Atlantic City has lost more than 60% in gaming revenue.
The Director of New Jersey’s Division of Gaming Enforcement, David Rebuck stated that Atlantic City has faced more unique challenges that any other city in the U.S. One of the main reasons why Atlantic City has been affected so badly is because the gaming industry has expanded too rapidly on the East Coast and New Jersey lost its monopoly as casinos started opening up in neighboring states such as New York, Delaware, Maryland and Pennsylvania.
Fitch Ratings Service released an analysis in June which predicted that the U.S. casino industry will face a decline during the next 12 to 18 months. The report predicted that gaming revenue across the nation could possibly decline by as much as 3 to 5 percent. These stats could be much higher based on current market condition in New Jersey.
In a statement, Rebuck said
The industry refuses to acknowledge the market is saturated, especially in our area of the country for convenience gaming. The U.S. gaming industry has been cautioned. Other jurisdictions are struggling and they better start doing their work now.
If they don’t, they’re going to start using our business model in the future. They are going to have to look at what we are doing in Atlantic City.
Rebuck stated that New Jersey has to adapt to the changes and come up with a new market strategy in order to receive. He stated that Las Vegas has set the trend and it would be wise for New Jersey to quickly adapt to a similar business model. Las Vegas currently offers a number of non-gaming attraction and amenities such as strip resorts that bring in close to 65% of their annual revenue via non-casino related sources.