Wall Street Firm Expects More Casinos In Atlantic City To Close Down

New Jersey’s Atlantic City was once a thriving hub for the casino industry but all that has changed during the last three years. The casino industry in Atlantic City went through a trying time in 2014 and four out of the twelve casinos were forced to go out of business due to the declining gambling market in the garden city.

Moody’s Investors Service, a research firm on Wall Street states that things will only get worse for casinos in Atlantic City during the next few years. Moody reports that competition from neighboring states will significantly impact gambling revenue in Atlantic City and will most likely result in more casinos going out of business.

Moody has stated that a total of eight casinos are expected to open in the Northeastern part of the U.S and their combined estimated value will exceed $5 billion.

Some of the casinos expected to open during the next three years will be located in New York, Massachusetts, Maryland and Pennsylvania. The increase in the number of casinos within the proximity of New Jersey will mean that gamblers from within the garden city will now a wide choice in determining where they want to play. A declining customer base and a growing supplier base has resulted in declining revenue for the New Jersey market and the eight casinos that are currently operating are not making huge profits but only surviving.

The closure of four casinos in Atlantic City during 2014 resulted in thousands of job cuts and also brought down the gaming tax revenue for New Jersey. The New Jersey casino industry has been in stagnation mode for a number of months and as a result none of the remaining eight casinos were hiring employees. This meant that casino employees who were laid-off had no opportunity to get a job in New Jersey and were forced to move out of state or change their career path e.g finding a job in an Atlantic City call center.

Moody’s estimates suggest that more casinos could close and result in more job losses. The Moody report states

As the number of casinos shrinks, some of the remaining casinos have seen revenues increase. But we expect increased competition will keep the heat on incumbents, and that number of casinos in Atlantic City will likely continue to shrink. We expect more casino closures to occur in Atlantic City as some struggle to grow their business and face additional competition.