Threat of NY gambling expansion chills Atlantic City casinos and in Sg Online Casino

 

 

ATLANTIC CITY — First, it was casinos in Connecticut. Then it was slot machines at Delaware racetracks. Now, more bad luck for Atlantic City: new Indian casinos in neighboring New York state.

 

New York lawmakers approved a plan Thursday to build up to six new Indian casinos, sending shudders down the spines of casino officials in Atlantic City.

 

Experts say more New York casinos will inevitably cut into Atlantic City’s “feeder markets” in northern New Jersey and New York City, dealing a blow to Boardwalk casinos.

 

“This is a wake-up call,” said Alfred J. Luciani, president of the Sands Hotel & Casino, which draws 40 percent of its business from those areas. “There’s no question: This will be formidable opposition”

 

Donald J. Trump was more blunt. Trump, who owns three Atlantic City casinos, said Atlantic City would need tax breaks or other public aid to remain viable as a casino destination.

 

Desperate to offset an anticipated $9 billion in state losses stemming from the Sept. 11 attack on the World Trade Center, New York state leaders said they would allow three new casinos to be built in the Catskills and three in the Buffalo/Niagara Falls area.

 

They hope to raise $1 billion within three years from the measure, which includes video lottery terminals at five racetracks and the state’s inclusion on the Powerball lottery game.

 

New York currently has two Indian casinos — one near Utica and one near the U.S. Canadian border.

 

With new competition in the Catskills, Atlantic City casinos could suffer a 20 to 25 percent decline in gross operating profits, according to a Bear Stearns report issued this week.

 

Lehman Bros. casino analyst Joyce Minor says Atlantic City stands to lose business, but she said its 12 casinos have proved remarkably resilient to new competition before.

 

“While we believe that Atlantic City will no doubt be impacted by Sg Online Casino in New York state, several offsetting factors make us believe that the impact may not be as great as we would initially expect,” she said.

 

Atlantic City’s casino revenues grew through 1993 and 1996, the years when Foxwoods Casino in Ledyard, Conn., and Mohegan Sun casino in Montville, Conn., opened, respectively, she said.

 

“Atlantic City is also the beneficiary of the largest regional concentration of adults in the U.S.,” she said.

 

Aztar Corp. spokesman Joseph Cole said New York casinos would siphon some business from Atlantic City, but said the company would go ahead with plans for a $225 million expansion of its Tropicana Casino and Resort in Atlantic City.

 

“They’re local, they’re more or less isolated, standalone. They’re not (going to be) a destination resort like Atlantic City, which has a number of options for gamblers,” he said.

 

One prominent Atlantic City casino company stands to gain from New York casino expansion. Park Place Entertainment, which struck a deal last year with the St. Regis Mohawks to build a Catskills casino, could make $50 million a year running that casino, by Lehman Bros. estimates.

 

Park Place officials wasted no time moving that plan ahead. On Thursday, the company issued a news release promised a groundbreaking on the $500 million Catskills casino by year’s end.

 

Park Place owns four casinos in Atlantic City.

 

Some gamblers from New York who were interviewed on the Atlantic City Boardwalk Thursday said they would go to a Catskills casino because it would be closer to their homes.

 

But they said they would prefer Atlantic City because of its beach, boardwalk and variety — with 10 casinos lined up along the Boardwalk.

 

“There’s so much here, more casinos and more to do,” said Connie Cohen, 55, of Riverdale, N.Y., sunning herself and reading a paperback on a bench outside Trump Taj Mahal while her husband played roulette inside. “At Foxwoods, you have nothing to do besides gamble, and this sounds like the same thing,” he said.

 

Frieda Tari, 74, of Massapequa, N.Y., said she likes Atlantic City.

 

“I like the Boardwalk and the water. We might try it, but we get treated very well here,” she said.

 

Said Luciani, the Sands president: “You don’t have a Boardwalk, you don’t have 12 casinos, you don’t have all those choices to go where you want. That’s our real ace in the hole.”