Let the Revel now begin

THE SugarHouse Casino on the Delaware river in Philadelphia was packed on a recent federal holiday. The slot machines were almost all occupied. The betting tables were busy. The car park was nearly full. SugarHouse, along with Pennsylvania’s ten other casinos, has been siphoning away much of Atlantic City’s gambling business. So much so that Pennsylvania, which did not open a casino until 2006, is now the second-largest gambling market in America after Las Vegas, bypassing the “City by the Sea”, which held a monopoly on gambling in the north-east for nearly 30 years. Atlantic City has just ended its sixth straight year of falling revenues.

The growth of gambling in neighbouring states, especially Pennsylvania and New York, Atlantic City’s main markets, has severely affected gaming revenues in the city itself. Pennsylvania’s lawmakers placed casinos in or near big population centres. Philadelphia, which is only 65 miles (105km) from Atlantic City, has four new casinos in or near it. Advertisements on New York’s subway remind commuters that gaming is now minutes away, not hours. In New Jersey casino gambling is restricted to Atlantic City, a relatively isolated beach town with a famous Boardwalk. Gamblers would rather spend their time betting than driving.

Atlantic City was already in trouble. The recession has been tough, and gaming is down in most markets. Superstorm Sandy also dealt a blow. Although the casinos and most of the Boardwalk escaped unscathed, the casinos were ordered to be closed for more than four days. Road closures deterred visitors. Petrol rationing in November made driving difficult. Would- be gamblers in New York City and in northern New Jersey are still affected by the storm and have little cash to spend.

Yet the expansion of gaming in neighbouring states was a long time coming. Atlantic City was far too slow to react to the changes, and those who saw the writing on the wall were paralysed because of the freeze in the capital markets. There was little money to expand or to improve amenities. Las Vegas, which took a similar knock when Indian casinos began to operate in next-door California, made itself a venue for entertainment, not just gambling. Atlantic City needs to do something similar.

It is already taking small steps along that path. A growing number of visitors are coming for shows, spa treatments and shopping. Retail trade is doing particularly well, as are national restaurant chains.

In May a new casino, the Revel, opened, with a different business model from Atlantic City’s 11 other casinos. It relies more on revenues from conventions and meetings, and seeks to attract leisure travellers as well as gamblers with its spa, nightclubs and concerts. It is smoke-free, and visitors do not have to brave the casino floor to get to their hotel rooms. Gaming is not doing well; but a version of the model might possibly work at other venues in the city.

Atlantic City still has plenty going for it. It has the Boardwalk and a big sandy beach. It also has a lot of casinos crammed together. If a gambler is having bad luck in one, all he has to do is stroll down the Boardwalk and try his hand next door. That sheer convenience of multiple temptations is hard to duplicate elsewhere.