The explosive growth of casino gambling across the country finally has made its way to the nation's biggest city, creating even more competition for the slumping Atlantic City market.
Boasting some familiar New York themes, an $830 million casino opens Friday at the Aqueduct racetrack in Queens. Dubbed Resorts World Casino New York City, it initially will feature 2,280 video slot machines and 205 electronic table games amid some Times Square-inspired decor, its operator says.
"It will be a very vibrant and energetic space - a lot of activity," said Michael Speller, president of Resorts World New York, a subsidiary of the Genting Group, the world's largest casino and leisure company.
A second phase of the casino, slated to open in December, will include an extra 2,245 video slots and 270 electronic table games in a more upscale Fifth Avenue-style setting. There also will be a special-events center and concert hall evoking a Central Park theme.
Surface lots and a 2,500-space garage will provide parking for drive-in customers, but there also are plans for a skybridge to connect the casino with a subway station that stops at Aqueduct.
"You can get on a train in Manhattan and come right out to the property. I don't believe there is a casino anywhere else in the world that has a subway station attached to it," Speller said.
A decade in the making, the casino project was slowed by political debate and the selection of its operator. While it may represent good news for New York, the Aqueduct casino is another setback for the competition-weary Atlantic City marketplace. Atlantic City now is at risk of losing a chunk of its New York-North Jersey feeder market to Aqueduct, gaming executives and analysts say.
"Certainly it can't help. It's going to hurt. But I don't think it's going to hurt nearly as much as competition from Pennsylvania," said Tony Rodio, president and chief executive officer of Tropicana Casino and Resort.
Rodio believes that Atlantic City will not be the only market to suffer from extra competition in New York. He said casinos in Connecticut, Rhode Island and Pennsylvania also will take a hit.
"I think the pain will be spread out more than when Pennsylvania opened and virtually all of the impact was felt in Atlantic City," Rodio said.
Analyst Chad Beynon, of Macquarie Capital Inc., predicts New York gambling only will add to the "precipitous decline in Atlantic City," where the market has plunged more than 30 percent since peaking at $5.2 billion in annual gaming revenue in 2006.
Since late 2006, Atlantic City has been fighting stiff competition from Pennsylvania's new casinos. Delaware's racetrack casinos became a more formidable competitor last year by adding Atlantic City-style table games to complement their slot machines. Maryland is in the process of opening new slot parlors to add to the crowded Northeast gaming market.
"We still believe that Atlantic City remains pressured by neighboring competitors in Pennsylvania and New York. In our view, this will only get worse when the Aqueduct racino opens its doors," analyst Justin T. Sebastiano, of Morgan Joseph TriArtisan LLC, wrote in an investment note.
"Racino" is a term for a combination casino and racetrack. Resorts World Casino will provide millions of dollars a year in revenue to New York state and its cash-strapped horse-racing industry. A racetrack in Yonkers, N.Y., already has a casino, and Belmont Park racetrack on Long Island may get one in New York's rush to capitalize on the gaming wave.
Speller estimates the Aqueduct casino will pull in $800 million annually in revenue. Borgata Hotel Casino & Spa, Atlantic City's top-performing property, grossed $647.7 million in gaming revenue in 2010.
Keith Smith, president and CEO of Boyd Gaming Corp., Borgata's parent company, maintained Aqueduct would cause little harm to the Atlantic City gaming industry overall and none to Borgata.
"We don't expect any impact from the opening of that (casino)," Smith said of Borgata during a conference call Tuesday to discuss Boyd Gaming's third-quarter earnings.
Speller, who formerly served as president of the Foxwoods Resort Casino in Connecticut, argued there is plenty of room for more gaming in the Northeast corridor. He noted that New York City's millions of tourists and the large number of foreign visitors flying into nearby John F. Kennedy International Airport provide a potentially rich customer base for his casino.
"I don't necessarily believe that the Northeast gaming market is oversaturated," Speller said. "I think that Atlantic City and Resorts World Casino New York City can effectively co-exist."
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