Casinos in Atlantic City, East Coast say demand for slot machines vanishing - pressofAtlanticCity.com: News

Casinos in Atlantic City, East Coast say demand for slot machines vanishing - pressofAtlanticCity.com: News

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Casinos in Atlantic City, East Coast say demand for slot machines vanishing

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Posted: Saturday, July 10, 2010 7:45 pm | Updated: 7:51 am, Mon Jul 12, 2010.

ATLANTIC CITY — Walk into virtually any casino and you’re confronted by an array of whirling, spinning, beeping and flashing slot machines — a jaw-dropping experience in sensory overload.

But, imperceptible to most gamblers, the casino cacophony has been toned down a bit in Atlantic City and other gaming markets on the East Coast.

The weak economy, plummeting profits and competitive pressures have prompted casinos to dramatically reduce the number of slot machines in recent years.

In Atlantic City, the number is down about 9 percent in the past 12 months and has plunged 30 percent since peaking at nearly 42,000 slot machines in January 2005. Now, there are only about 29,000 machines scattered across the 11 casino hotels, figures show.

“When I look at the casinos, every one is down double digits in terms of slot supply,” said Shawn McCloud, director of analysis for Spectrum Gaming Group, a Linwood-based casino consulting firm that tracks the numbers. “Particularly with Atlantic City, I believe it’s truly a function of supply and demand.”

McCloud stated it does not makes sense for Atlantic City’s casinos to maintain 42,000 machines anymore when so much of their slots business has migrated to Pennsylvania following the start of legalized gaming there in 2006.

“There are over 21,000 slot machines within a three-hour drive of Atlantic City that weren’t there four years ago,” he said, also noting that Yonkers Raceway in New York has been siphoning away casino customers from New Jersey.

Atlantic City is not alone in the slumping slots market. On the East Coast, Connecticut, Delaware, New York, Rhode Island and West Virginia also have pared the number of slots in the past 12 months. Only Florida, Maine and Pennsylvania are up, according to figures compiled by Spectrum Gaming.

“Basically, we’re just reacting to a lack of demand. If there isn’t a demand for a large number of machines, there’s no need to have them out,” said Mitchell Etess, chief executive officer of the Indian-owned Mohegan Sun casino in Connecticut.

Mohegan Sun and the rival Foxwoods casino have reduced the number of slot machines in response to declining revenue in the Connecticut market. In March, April and May, Foxwoods trimmed its inventory by 7 percent, to 7,114 machines, while Mohegan Sun was down 6.1 percent, to 6,351 slots, during the same period.

Delaware’s three racetrack casinos have been removing slot machines, in part, to make room for their new Atlantic City-style table games. Pennsylvania will introduce table-games gambling this month, but the Keystone State’s fledging casino market continues to grow on the slots side as well. There are nearly 25,000 slot machines at the nine Pennsylvania casinos, an increase of 26 percent in the past 12 months. The opening of three new casinos in 2009 helped to boost Pennsylvania’s numbers.

Pennsylvania’s gambling boom has also hurt the Delaware casinos. Ed Sutor, chief executive officer of Dover Downs Hotel & Casino, said the Delaware properties have been fighting to hold on to market share amid the sluggish economy and intense competition from Pennsylvania.

“We got hit by Pennsylvania, too. The economy hit us, too,” Sutor said, drawing comparisons between Delaware and Atlantic City.

Profit-minded casinos focus on how much each slot machine grosses, or “wins,” per day. Sutor pointed out that once a machine dips beneath the industry standard of $230 to $240 win per day, it is usually removed.

“If it slips below that, we have too much capacity,” he explained.

Although the economic downturn and fierce competition are the main reasons for the shrinking slots supply, other factors are at play. In Delaware, for instance, casinos sometimes keep their slot machine inventory below 2,500 machines to avoid state fees that kick in at that threshold.

Casinos are also cutting back on the number of slot machines for aesthetic purposes. Once, it was perfectly acceptable for casinos to pack the gaming floor with row after row of slots. The trend these days, however, is for more space and wider aisles.

“Customers like to be able to navigate through the facility,” Sutor said. “They don’t want slot machines on top of them. Customers tell us it’s more appealing to have wider space.”

The Atlantic City Hilton Casino Resort recently replaced 700 older, underperforming slot machines with 400 new models, creating more breathing room in the process. Borgata Hotel Casino & Spa has also been sprucing up its gaming floor by adding new machines and opening up more space.

“We’ve had an ongoing process of rejuvenating our floor, making it more exciting and comfortable,” said Joe Lupo, Borgata’s senior vice president of operations.

Borgata once had more than 4,000 slot machines. However, it has cut nearly 500 machines this year and now has 3,447, Spectrum Gaming’s figures show. Lupo said Borgata is simply responding to the changing tastes of the marketplace — yanking old machines and putting in popular new brands such as “Sex and the City” and “The Amazing Race.”

“We’re taking out old machines that, frankly, aren’t as relevant,” he said.

On a recent Tuesday morning, normally a slow time for casinos, all seats were occupied at Borgata’s bank of “Sex and the City” and “The Amazing Race” machines. Yolanda Catanzarite, 81, of Pompton Plains, Morris County, was busy playing a “Sex and the City” penny slot machine while her sister-in-law, Grace Marchione, 78, of Nutley, Essex County, waited her turn.

“I feel young when I look at that machine, even at my age,” Marchione joked of the sexy themed slots.

“This is all we play,” Catanzarite said. “They’ve got to get more of these machines.”

Contact Donald Wittkowski:

609-272-7258

DWittkowski@pressofac.com

© 2014 pressofAtlanticCity.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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