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Sun August 17, 2014
Massive, Pricey Casino Fails After Two Years Of Operation
Originally published on Sun August 17, 2014 4:24 pm
TESS VIGELAND, HOST:
If you're just joining us, this is ALL THINGS CONSIDERED from NPR West. I'm Tess Vigeland. Picture Atlantic City, and you probably see the boardwalk, classic casinos, the Miss America pageant, maybe even saltwater taffy, which was invented there. Well, the chips are down for the place that was once the high-stakes playground for the entire eastern seaboard. Gaming revenue has dropped steadily over the years so the city has tried to reinvent itself. The most recent solution - a $2.4 billion resort and casino built along 20 acres of beachfront property.
ALAN WOINSKI: The Revel stands out.
VIGELAND: Alan Woinski is the president of the consulting group Gaming USA, in Paramus, New Jersey.
WOINSKI: It's a much more striking property - the problem is then, then you go inside, and that's when things start to fall apart.
VIGELAND: He says it feels cold and sterile inside, and the layout is just confusing.
WOINSKI: I couldn't find my way around there. There were empty spaces that tables or chairs or couches looked like they were just thrown there just to take up space.
VIGELAND: And he had to go up a series of escalators just to find the 130,000-square-foot casino.
WOINSKI: I think five minutes after I walked into the place, I said, I don't give this place a year.
VIGELAND: Well, it did last longer than a year, but not by much. Next month, the two-year-old Revel Casino will shut down.
WOINSKI: This is the most expensive casino in Atlantic City, and it was consistently - it was the second to last every month in gambling revenue.
VIGELAND: Woinski says last place goes to Atlantic City's Trump Plaza, also shutting down next month. Earlier this year, the Atlantic Club Casino Hotel closed, and the Showboat Casino will close in two weeks.
WOINSKI: You're going to have four properties just sitting there empty. It's a ghost town.
VIGELAND: In New Jersey, corporate profits from gambling have dropped by almost half from their peak in 2006.
BRENT PIROSCH: Gaming revenue in Atlantic City right now is approximately where was back in 1989.
VIGELAND: Brent Pirosch is the director of casino consulting for CBRE in Las Vegas.
PIROSCH: So you've lost tremendous amount of growth - more than two decades worth of growth of gaming revenue in that market. I mean, that's really hard to swallow.
VIGELAND: New Jersey is getting hit hard, but he said this is part of a national trend.
PIROSCH: You've really seen declines in almost every single state, and it seems to be a function of both people being a little more cautious after the recession, and really casino gaming tends to be kind of at the bottom of the list for a lot of folks right now.
VIGELAND: But the biggest challenge Atlantic City faces is that it's now in the middle of a saturated gambling market. According to The New York Times, more than half the population in the northeastern United States lives within 25 miles of a casino - from Pennsylvania to Rhode Island. Pirosch says the market in Atlantic City is just leveling out.
PIROSCH: I don't see Atlantic City disappearing by any means, but how much further there is to correct kind of remains to be seen right now.
VIGELAND: The million dollar question - multimillion dollar question really - is what will become of that massive Revel Casino building. Alan Woinski from Gaming USA says someone will buy the property. They could be converted into a hotel or high-end condos. If it opens up as another casino, he says it will be a huge investment.
WOINSKI: They're going to have to close the place up - think $100 to $150 million and try to at least fix the really glaring errors.
VIGELAND: So far, no one has stepped up to bet on it.
(SOUNDBITE OF SONG, "ATLANTIC CITY")
ROBERT GOULET: (Singing) Atlantic City, my old friend. Transcript provided by NPR, Copyright NPR.