A top Atlantic City gambling executive lashed out Tuesday at casino competitors in surrounding states, ridiculing them as little more than “Walmarts with slot machines.”
Tony Rodio, chief executive officer at Tropicana Casino and Resort, predicted that the slumping Atlantic City market is finally on the verge of a comeback — in large part because he believes other casinos in the Northeast simply don’t have the attractions to compete with the seaside resort.
“We have a huge advantage over these regional competitors because of our diversified experience,” Rodio said in keynote remarks during the opening day of the 17th annual East Coast Gaming Congress at Boardwalk Hall.
“These regional competitors are, for the most part, Walmarts with slot machines and a bar and a restaurant,” he continued.
After a steady dose of bleak news for six years in a row, Rodio gave a surprisingly optimistic outlook for the Atlantic City market. Paraphrasing a famous Mark Twain quote, he contended that reports of Atlantic City’s death are “greatly exaggerated.”
“I think the future is not as gloomy as anyone would have you expect to believe,” said Rodio, who also serves as president of the Casino Association of New Jersey, an industry trade group.
Rodio conceded that Atlantic City gambling revenue likely will fall again in 2013, representing the seventh consecutive year of declines. But he predicted the market is headed for a recovery once it shakes off the lingering effects of Hurricane Sandy.
Atlantic City gambling revenue has plunged more than 40 percent since peaking at $5.2 billion in 2006, the same year rival casinos began opening in Pennsylvania. Atlantic City revenue sank to $3 billion in 2012 amid intense competition from new casinos in Pennsylvania, New York and Maryland.
However, Rodio believes casino customers ultimately will grow tired of the relatively modest casinos in other states and will return to Atlantic City for its resort-style attractions.
“I’m actually upbeat about Atlantic City,” he said.
Rodio cited the casino industry’s push for more nongambling attractions to broaden the market’s appeal to tourists. He noted that the Memorial Day weekend marks the formal debut of new bars, restaurants, beach clubs and nightclubs at casinos across town, including a $35 million Margaritaville-themed expansion at Resorts Casino Hotel.
Although gambling revenue has plummeted, Rodio pointed to growth in the city’s hotel-room, luxury-tax, sales-tax and parking fees as proof that nongambling attractions are generating more business for the market.
“There are a lot of positives that go beyond the gaming-revenue report,” he said.
The Northeast casino market has become hyper-competitive in recent years. During his remarks at the conference, Rodio used a graphic to show how Atlantic City has become surrounded by more than 60 casinos in neighboring states.
“I feel good that we’re still a $3 billion market,” Rodio said.
In 2012, Pennsylvania’s 11 casinos grossed about $3.1 billion to overtake Atlantic City in gambling revenue for the first time. Pennsylvania is now the second-biggest casino state — behind Nevada — in terms of gambling revenue.
Rodio, though, argued that people mistakenly compare the entire Pennsylvania gambling industry with the Atlantic City market. He noted that Pennsylvania’s casinos are spread out across the entire state, while the Atlantic City properties are concentrated in one location.
“Atlantic City is still the second-biggest gaming market in the United States,” Rodio asserted. “Pennsylvania is not a market. Pennsylvania is a state.”
New Jersey hopes to gain an advantage on casino competitors by introducing Internet gambling this year. Starting Nov. 26, the Atlantic City casinos will be allowed to offer online betting on slot machines and table games through their websites. However, it is not yet clear whether all or any of the casinos will be ready to begin Internet gambling on that date. They are still working with New Jersey casino officials on the regulations and planning.
Lottery officials, during a panel discussion at the East Coast Gaming Congress, predicted that Internet wagering could lead to explosive growth in the gambling industries. Michael Pollock, a casino analyst who moderated the panel, said Internet gambling is drawing casinos and lotteries closer together.
“The world is changing, and there’s going to be a convergence or collision — hard to say — as casinos and lotteries move online,” said Pollock, managing director of Spectrum Gaming Group, a Linwood-based consulting firm that serves as a primary sponsor of the gaming congress.
The conference wraps up today with a daylong agenda, including presentations by casino CEOs and panel discussions on Internet gambling, casino regulations and Wall Street’s view of the casino industry.
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