When Atlantic City’s casinos closed down last week for Hurricane Sandy, so did Specialites La Cote Basque Bakery.
“Since 90 percent of my business is with the casinos, this has been crippling,” said Bruce Millington, owner of the Pleasantville bakery.
Millington and scores of other vendors who supply goods and services to the casinos are among the victims of Hurricane Sandy. Although most of the casinos reopened Friday and Saturday after a five-day shutdown, the vendors are still suffering from the loss of business.
At Avalon Limousine Service, owner Jeff Roberts was forced to cut back on drivers and other employees during the shutdown. With no casino customers to carry, Roberts saw 35 percent of his limo business wiped out.
“If there’s no work, they have to stay home,” Roberts said of his employees. “We’re cutting back because we don’t need them. The phones aren’t ringing. Things are quiet.”
Casino vendors represent a diverse group of food suppliers, service companies, construction contractors and more. In the casinos’ pre-recession heyday, they shared the riches with Atlantic City’s dominant industry. The ripple effect has been jeopardized in recent years by the casinos’ revenue slump. Now, Hurricane Sandy has inflicted another blow.
“We have to — no pun intended — weather the storm,” Roberts said.
Roberts, who has been in business for 21 years, has 80 employees and 40 limos at his Pleasantville-based company. As devastating as the loss of casino business had been, Roberts was able to hang on because corporate and private customers represent about 65 percent of his client base.
“Other limo companies have been affected even more by the shutdown because most of their business is with the casinos,” Roberts said.
Millington’s bakery is also almost fully dependent on the casinos. Specialites La Cote Basque supplies rolls and bread to restaurants at 11 of the 12 casinos. He temporarily closed the bakery when his casino business stopped.
“I can’t even open for someone who says, ‘I need two dozen of this or two dozen of that,’” Millington said of serving smaller customers. “I need to be in full production to make money.”
Millington said he will need time for the mixing, baking and packing of rolls and bread sold to the casinos, meaning that there will be no immediate big cash infusion now that the shutdown has ended. Some of Millington’s suppliers have had difficulty making deliveries to the bakery because of flooded roads and widespread power outages, further complicating the start-up process.
One casino consultant said vendors will continue to suffer because the gambling industry will take some time to return to normal business levels in the hurricane’s aftermath. If business lags, the casinos will respond by cutting back on the supplies and services they get from vendors, he said.
“These poor guys have to get back online. I just hope that the casinos buy at the same volumes as before the storm,” said Saverio R. Scheri III, president and CEO of WhiteSand Gaming LLC, based in Atlantic City and Las Vegas.
Scheri described vendors as the backbone of the gambling industry. Many of them are small businesses and cannot afford having their cash flow cut off by a hurricane shutdown, he said.
“For small businesses to take a hit like this one, that is not a little bump in the road. It’s a huge hit for them,” Scheri said.
In the late 1980s and early ’90s, more than 4,000 New Jersey vendors did business with the Atlantic City casinos. However, that number has declined over the years, reaching a low of 1,782 in 2011, according to figures compiled by the New Jersey Division of Gaming Enforcement and the New Jersey Casino Control Commission.
New Jersey vendors did nearly $1.8 billion worth of business with the casinos last year, compared with $1.1 billion in 2010. The 2011 increase is believed to be due largely to last year’s construction of Revel, the $2.4 billion megaresort that opened in April.
The casino industry’s largesse touches vendors in all 21 New Jersey counties. About 50 percent of New Jersey casino vendors are based in Atlantic County. All other counties are in single digits, figures show.
Casino vendor business also spreads outside New Jersey. In total, Atlantic City’s casinos did $2.45 billion worth of business last year with nearly 4,900 vendors. The bulk of the business went to vendors in New Jersey, Pennsylvania and New York, although other states and some foreign companies also benefited.
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