ATLANTIC CITY – Standard & Poor’s downgraded Atlantic City’s credit rating from A-minus to BBB-plus on Monday, citing mainly the closing of four of 12 casinos this year.
The downgrade, which includes a negative outlook for the city, comes as Atlantic City is struggling with the loss of tax revenue because of the closures.
Combined, the shuttered gambling halls – Atlantic Club, Showboat, Revel and Trump Plaza, which closed last Tuesday – generated about $75 million in property tax revenue last year. A fifth – Trump Taj Mahal – may close in November.
After a previous bankruptcy in 2010, during which Donald Trump lost control of the company to hedge funds, Trump Entertainment attempted to retool its operations, but failed to increase revenue and profits, the company’s chief executive, Robert Griffin, said in a court filing Tuesday.
Operating losses at Trump Entertainment, which also owns Trump Taj Mahal, soared from $5.1 million last year to $25.7 million in the first six months of this year, Griffin said. That put the company in a cash crunch.
Over Memorial Day weekend, it was easy to see all is not well here. Eight of the 12 casinos predate the mid-1980s — carpets are grungy, paint is chipping off the walls, and far fewer employees are working the gaming floors.
As the sun broke through after a blustery Friday and Saturday, the Sunday crowds picked up on the Boardwalk. By midafternoon, it teemed with strollers and patrons at the outdoor restaurants.
But parking was available at several casino garages, a telltale sign it was not the hoped-for blockbuster weekend. Business volume varied among properties.
At the newer Borgata, for example, there was a waiting list in the poker room and a steady stream of traffic throughout the casino. At the barely year-old Revel, which just emerged from bankruptcy and opened new smoking lounges Friday, the sixth-floor casino parking level was filled with cars for the first time. At dowdy Trump Plaza, meanwhile, an older generation half-filled the intimate gaming floor, and people in their 20s and 30s packed its outdoor beach bar.
English: Pennsylvania county map (Photo credit: Wikipedia)
When it comes to gambling meccas, you might want to start counting Pennsylvania among them.
Pennsylvania casinos generated more tax revenue last year than those in any other state and more gross revenue than any state but Nevada, according to a national American Gaming Association report released Monday.
The “State of the States: The AGA Survey of Casino Entertainment” found that the commonwealth’s 11 casinos produced nearly $1.5 billion in tax revenue in 2012, up 2.1 percent from the previous year. Nevada placed second at $868.6 million and New York third at $822.7 million.
I am not surprised to learn that Atlantic City is taking a huge hit from all the recent casino development in surrounding states. Rising gas prices and a major recession are not helping things either.
Pennsylvania, under Fast Eddie, became a gambling state. Our casinos are spread out across the state, not all in one place. This seems to be a better strategy than New Jersey. 10 casinos are now operating in Pennsylvania. Atlantic City has 11.
I am sure Atlantic City depended on throngs of people from Pennsylvania coming there to gamble and spend money. Pennsylvania may very well pass Atlantic City as the number two gambling market in the U.S. in the years to come. Pennsylvania casino income is expected to grow to $2.7 billion dollars in 2011 while Atlantic City’s 2011 casino income is expected to fall to $3.09 billion dollars.
The last time I drove to Atlantic City, it was a ridiculously expensive trip. Bridge tolls, Atlantic City Expressway tolls, parking and gas made it a $50 trip before I set foot in a casino or shop. I went down for an afternoon to meet friends from high school who were staying at a casino. I will not be making that trip again.
Time will tell if Atlantic City can rebound or if Pennsylvania will unseat Atlantic City as the number two spot in the U.S. for gambling.