Boardwalk rebound

Optimism reigns in Atlantic City for this summer despite continuing uncertainty surrounding pandemic restrictions

Daniel J. Munoz//May 3, 2021

Boardwalk rebound

Optimism reigns in Atlantic City for this summer despite continuing uncertainty surrounding pandemic restrictions

Daniel J. Munoz//May 3, 2021

Harrah’s Resort, Atlantic City at sunset. - CAESARS ENTERTAINMENT
Harrah’s Resort, Atlantic City at sunset. – CAESARS ENTERTAINMENT

Atlantic City casino executives say they expect summer tourism to explode this year, citing COVID-19 vaccination efforts, an ebbing pandemic, business re-openings and more outdoor activities that come with warmer weather. Boardwalk attractions, amusement rides, games, dining and entertainment all can be enjoyed outside.

“Do I think they’re going to do better this year than last year? Absolutely,” said Jeffrey Vasser, who heads the state’s Division of Travel and Tourism. “That’s not more than a function of the fact that this year they’re going to be open. Last year, they were closed until early July.” He estimated that the casinos make up 20% of summer tourism in the state, which declined significantly in 2020 compared to 2019.

There are nine brick and mortar casinos in Atlantic City: Bally’s, Borgata, Caesars, Golden Nugget, Hard Rock, Harrah’s Resort, Ocean Casino Resort, Resorts Casino Hotel and Tropicana. The gaming palaces did not reopen until July, and then at only 25% capacity. That’s now been increased to 50% capacity. According to figures from the New Jersey Division of Gaming Enforcement, brick and mortar casino revenue fell 80% in 2020 compared to 2019.

Atlantic City’s unemployment rate soared to an all-time high of 36% in May last year, far above the 16.6% state unemployment rate in April and the peak national unemployment rate of 14.8% in that same month. Beyond the casino floors themselves, local workers employed at the hotels, retail, dining, personal services, fitness, entertainment, and events and conferences all were affected.

“If not for internet gaming for the casino industry, the loss would have been significant,” Vasser said. In March, online gambling wins for the house reached an all-time record high. The interest in online gaming is likely to continue, but visitors could be ready to finally get out of the house and head to Atlantic City.

“What we’ve known even pre-pandemic is online casino players are often very different from a land-based customer for the casinos, and have been additive to the bottom line,” said Dustin Gouker, an analyst with PlayNJ.com. He added that while the demand for online gaming might not surge month to month, the state has nonetheless “created a new floor in terms of revenue around $100 million in any given month.”

Jane Bokunewicz, Institute Coordinator & Associate Professor of Hospitality, Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University.

“Online gaming is showing no signs of slowing even as brick-and-mortar play begins to rebound.  In the summer, people can just play on the beach rather than on the couch,” said Jane Bokunewicz, who heads the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton University.

Gouker said that “the rest of the Atlantic City casino and resort industry should be primed for a massive summer … There is almost certainly pent-up demand for gambling and Atlantic City amenities.”

In fact, the state’s largest arcade is opening on May 15 at the Showboat Hotel in Atlantic City, which does not have a casino. And Caesars Entertainment announced in April that it’s spending $170 million to upgrade hotel rooms at two of its properties: Harrah’s Resort and Caesars. Those open this summer, just in time for the tourist season. “We remain bullish on Atlantic City, and this commitment will further position us for long-term growth and success,” Caesars Chief Operating Officer Anthony Carano said in an April 21 statement.

Bally’s said it’s expanding several of its outdoor amenities and dining alongside the boardwalk in expectation of warmer weather and further reopening measures. “We are encouraged by the progress the State has made in its reopening efforts and expect additional advancements throughout the spring and into the summer months, which has historically proven to be our strongest performance period,” said Phil Juliano, Bally’s chief marketing officer.

NJ online casino revenue over time - PLAYNJ.COM
New Jersey online casino revenue over time. – PLAYNJ.COM

FanDuel, which has a sizable presence in the online sports betting realm, still operates the Bally’s brick and mortar sportsbook. Its presence on the Boardwalk gives it a “huge advantage over every other sportsbook in all of [Atlantic City],” said Andrew Kleiman, who heads FanDuel’s retail operations.

“FanDuel has its own entrance (and marque signage) directly off the Boardwalk where you can wager without having to walk through the casino at all,” Kleiman said in an email. “You can literally come off the beach, place a bet, and go back to the beach bar 30 feet outside the entrance.”
Resorts said it is also expanding and adding in new dining and amenities this summer, including daily live outdoor entertainment. “With the increase in vaccination efforts, we are seeing a steady rise in visitation, and we are very happy to see the energy and excitement returning to the property,” said Mark Giannantonio, Resorts president and CEO.

Most casino executives and industry leaders expressed cautious optimism: restrictions were not quite lifted to the level needed for a full rebound. Indoor dining, retail and casinos are still capped at 50% capacity, though Gov. Phil Murphy has suggested that the state would “accelerate” its reopening if vaccinations and case numbers continue to trend in the right direction.

Joe Lupo, president of Hard Rock in Atlantic City.

“[W]ith indoor dining capacities and bar restrictions at the current levels, it will be very difficult to accommodate demand and optimize guest experience,” Joe Lupo, president of Hard Rock in Atlantic City, said in a statement. “Additionally, the current 250-person limit on entertainment, meetings and conventions significantly hinders the ability for business in Atlantic City to fully rebound to our fullest potential.”

That pain could be particularly felt at the Atlantic City Convention Center, a 500,000-square-foot venue that could bring in tens of thousands of visitors for events in a normal year.

Larry Sieg, president and chief executive officer of Meet AC, which operates the convention center, said the focus has shifted to outdoor summer events like sports competitions for the time being. Indoor events typically “slow down” during the summer, he explained, and so Meet AC pivots to outdoor sports competitions.

“We still have events on the books for the convention center for May, June, July, but a lot of those are probably going to have to be rescheduled and moved again,” he said in an interview. But larger conferences and conventions typically scheduled for colder months are being moved to whenever is available, even in the summer. “It’s a complete shift,” he said.

Larry Sieg, president and chief executive officer of Meet AC.
Sieg – MEET AC

Still, many of the large conventions are on the books for the convention center this winter. The Atlantic City Classic Car Show and Auction is scheduled for February next year and is expected to draw 30,000 attendees. Both the New Jersey Education Association and the New Jersey League of Municipalities are scheduled to have their annual conventions at the center this November, according to the Meet AC calendar. Both events typically bring tens of thousands of attendees.

But the Casino Association of New Jersey, which serves as the trade group for all nine casinos, said indoor restrictions limit just what the casinos can do. “It’s now more important than ever that we ease indoor capacity restrictions to allow our properties to resume indoor meetings and conferences,” the CANJ said in a written statement. “We are prepared and ready to safely bring back conventions and meetings with the same rigorous health and safety protocols we have been employing since our reopening last July.”

A March survey from the LIGHT Institute showed that 70% of 806 respondents polled said they plan to return to Atlantic City within the next six months. Bokunewicz predicted that outdoor events will continue to “expand to get maximum capacity,” given how much easier it is to prevent the spread of COVID-19 in those environments. “Outdoor dining has proven to be an appealing amenity to restaurant goers.”

Most events will simply have to be held outdoors, like concerts, festivals, dining and some conventions. But they’ll be at the mercy of the weather rather than COVID-19.

“Conferences, conventions, events and large indoor gathering entertainment attractions will be the slowest to fully recover,” she acknowledged. “[E]ven at 20% capacity indoors, some events can be held, though the cost/profit ratio will have to be considered.”