Quote: WatchMeWin
I think the bigger picture here is something no one is talking about... sports betting in AC! It is inevitable. I feel that they are opening these casinos with the expectation of sports betting becoming legal in NJ. Otherwise, it would be foolish to continue to saturate the city with more casinos when people in any state can go to their local spot to eat, drink, gamble and see shows. AC is not the destination it once was. Sure, summertime they can draw from the beach crowd.. but that's it.
That's an interesting take, and it would certainly be interesting to see some results from a locale aside from Nevada. Of course, none outside of Nevada (but still in this country) exist.
However, UNLV has tracked the sports betting win from 1984-2016 and has published the results:
http://gaming.unlv.edu/reports/NV_sportsbetting.pdfThe most interesting column, in my opinion, is the percentage of the casinos' total win that actually comes by way of the sports books. I find it interesting because, in terms of total casino win, the range since 2000 has been 1.07% (2004) to 2.09% (2015). 2015 beat the previous high in that regard, which is the 2.06% had in 2014. I'm not sure why, but there was a big jump from 2011-2012 and then again from 2012-2013 which now seems to be basically sustained.
Either way, if we take the total live gaming win of 2,406,012,100 for 2016 in AC (the most recent year for which we have full data) and we call it 2%, then we would expect:
2406012100 * .02 = 48,120,242
Which is to say a revenue increase of about 48 million dollars.
While substantial, that revenue, which would in some way be divided amongst the entire city, only represents roughly 27.8% of
Resorts revenue for 2016 in terms of live casino win, and Resorts was the worst-performing casino in raw revenue numbers in 2016.
You mention the AC Summer crowd, and I also think that is another reason why sports betting will not increase revenues such in terms of live casino to justify or support two more properties on its own. The big problem being that, by far, football and basketball (mostly Winter sports) are the two biggest sports from a betting standpoint. In fact, there were a few years that football narrowly topped basketball and baseball,
combined.
It's definitely a consideration, especially if they end up being able to accept such bets online from NJ residents. I think that the online opportunity is also a consideration as it requires having a physical presence in the state. With that, you had five websites that divided up almost 200M in 2016 and 224.8M YTD as of November 2017 with one more month on the clock that will be reported in a few days.
In the end, I think at least one casino will have to close to accommodate the other two.
At least one. Either that, or one of those two may ultimately fail. Even with the additional revenue streams, I really don't see how something the size and scope of Revel and Hard Rock operate profitably without at least one other property closing. Even with the sports and online betting, I just don't think AC's revenue ceiling is high enough.
I mean, you can have online and AC YTD for November of 2017 is still a rounding error from 200M less than what the city did in just Live Casino Win back in 2013.
Now, you also had Trump Plaza, Showboat and Atlantic Club, (Ocean replaces Revel and Hard Rock replaces Taj Mahal) but I just don't know that you make up the revenue from these two other potential outlets to enable everyone to survive. The previous three generated 264.3M, combined, in total revenue to that point and all closed.
Looking at just Live Casino Win, the current AC operators are 427.8M down compared to 2013, November YTD for 2017. The operators who are now closed did a total of 580.8M in Live Casino Win in that point in 2013, so that includes Trump Plaza, Showboat, Atlantic Club, Revel and Taj Mahal.
What you're left with in potential Live Casino Win is about 153M to be split among two very large properties, as well as online and the potential for sports betting. That's not even close to what Resorts, the casino with the poorest gaming win in dollars and cents, has earned this year in live casino win.
Yeah...the more I look into this, the more I think someone will have to go. Bally's certainly. Beyond that is anyone's guess. Maybe Resorts. Maybe one of the two new places themselves.
Vultures can't be choosers.