Atlantic City Casino’s Depending On Customer Loyalty For Survival
The casino industry in Atlantic City is fighting for survival as market saturation and competition from neighboring states have posed a serious threat to Atlantic City casinos. In 2014, four out of the twelve casinos in Atlantic City were forced out of business and thousands of Atlantic casino employees were laid off.
Neighboring states such as Pennsylvania, New York and Maryland are also in the process of construction new casinos and New Jersey’s gaming association believe that these neighboring casinos could lure gamblers from Atlantic City across state borders and cause a further decline in the market.
The closure of four casinos in Atlantic City during 2014 has helped the remaining eight casinos to benefit in 2015 as customers from these four casinos have been forced to find a new place to gamble. The casinos in Atlantic City are not too concerned with the number of casinos that are springing up on the east coast because they believe that gamblers in Atlantic City tend to develop relationships with one or two casinos and then frequent them on a consistent basis and remain loyal.
Atlantic City had over 25,000 slot machines at the start of 2014 but with the closure of four casinos, the number of slot machines has now been reduced to just 17,000. The reduction in the number of casinos has resulted in more customers for existing casinos and an increase in profits by twenty six percent in 2015.
The Borgata Casino in Atlantic City had a strong first quarter posting a profit of eight two percent. Joe Lupo, senior vice president of the Borgata stated that it was important for Atlantic City casinos to be wise in investing their profits back into the business and developing a product that is attractive to customers and competitive to neighboring states. In a statement, Lupo said
Product’s extremely important, especially when you have a similar gaming product in your backyard in Pennsylvania, New York and Maryland, what’s the differentiator?
Atlantic City’s casino industry appears to be stabilizing but the unemployment numbers caused by the collapse of four casinos continue to pose a challenge for New Jersey. The unemployment rate is twice the national average and New Jersey leads in the number of foreclosures. The government is trying to roll out programs that will re-train these casino workers and provide them with a new skill-set that will allow them to find work in another industry.
