Firm: Money from closed casinos should stay in AC
ATLANTIC CITY, N.J. (AP) — A Wall Street firm predicts much of the revenue generated by three Atlantic City casinos that are closing will remain in the city after they're gone.
Fitch Ratings predicts the city's casino revenues will decline to $2.5 billion in 2015 from last year's $2.86 billion figure. It also says it does not see any more casinos closing in Atlantic City for at least the next two years.
The firm also predicts in a report Friday that a good chunk of the money being won by the Showboat, Revel and Trump Plaza will go to the surviving Atlantic City casinos. Showboat and Revel are closing this weekend; Trump Plaza shuts down Sept. 16. After that, Atlantic City will have eight casinos after starting the year with 12.
Fitch predicts at least 50 percent of Revel's revenue will go to the remaining casinos, based on increases that the Tropicana Casino and Resort and the Golden Nugget Atlantic City have seen since the Atlantic Club closed down in January.
The company also predicts 60 percent of Trump Plaza's revenue and 75 percent of Showboat's revenue will stay in Atlantic City, particularly with Showboat's parent company, Caesars Entertainment, also owning three other casinos that will continue to operate in Atlantic City.
Fitch says the three Marina District casinos — the Borgata, Harrah's and the Golden Nugget — may benefit more than the Boardwalk casinos because the marina properties are "the freshest" after major renovations in the last 10 years and because boardwalk activities are dwindling.
But it also predicts the Taj Mahal, Caesars and Bally's will get more business.
"Most of the closings are at the ends of the Boardwalk, leaving a cluster of remaining casinos (including Taj Mahal, Caesars and Bally's) that should see a sizable lift in business from the closures," the company wrote.
Fitch also noted some positives Atlantic City has going for it, including an 8 percent casino tax and diverse entertainment options.
"Atlantic City remains one of the few places in the populous tri-state area to offer a full suite of eat, play and stay options and has by far the lowest gaming taxes," Fitch wrote. "Lower taxes give these casinos more room in the margin to spend on promotional activity, including free food and hotel stays."
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