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sabato 4 giugno 2016

Atlantic City casinos in danger if gaming expands

Expansion of gaming outside Atlantic City could lead to as many as four additional casino closures, though expansion efforts face an uphill battle, according to Fitch Ratings.

Properties most susceptible to cannibalization include Trump Taj Mahal Casino Resort, Resorts Casino Hotel and Golden Nugget - Atlantic City. Fitch estimates a roughly 25% decline in Atlantic City's gross gaming revenue (GGR) would wipe out the operating profit before management fees of Golden Nugget, the most profitable of the three. This assumes proportional revenue loss among the existing casinos and that income falls by $1 for every $2 of revenue loss.

Declines of 10% and 20% in GGR would put Taj Mahal and Resorts at risk, respectively, under the same assumptions. Bally's - Atlantic City could also face an uncertain future, as Caesars ultimately closed the Showboat in September 2014 amid Atlantic City weakening and despite the property still being marginally profitable.

Casinos in Northern New Jersey still face a long and uncertain future before the November referendum to legalize gaming outside of Atlantic City. Public opposition for gaming expansion has been lessening, but is still meaningful at around 50%, according to the last Fairleigh Dickinson poll in January 2016. This was down from around 56% in June 2015.


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