Despite hurdles, Atlantic City is fresh off its best summer
Despite hurdles, Atlantic City is fresh off its best summer
The 25th Annual East Coast Gaming Conference, which took place last month at the Hard Rock Hotel & Casino Atlantic City, came at a particularly opportune moment as the industry emerges from the pandemic, armed with new lessons derived from those tough times while dealing with perilous economic conditions, as well as an uncertain road ahead. The event attracts industry leaders, legislators, regulators, educators, suppliers, gaming lawyers, media and other stakeholders to discuss trends and challenges.
With that backdrop to his keynote address, Gov. Phil Murphy sounded an optimistic note. “But, by any measure, the observation one can make is that Atlantic City is returning to its pre-pandemic levels of activity,” he said.
Despite all the hurdles, Atlantic City’s gaming industry is fresh off its best summer in recent memory with strong brick-and-mortar numbers and visitor metrics, which NJBIZ has extensively chronicled.
Murphy, who was speaking at the conference for the fourth time, reflected on his first speech in 2018 when he used terms like “hope to,” “aim to,” and “going to try to.” But, he made sure to say he was not spiking any footballs and that there is still a lot of the journey left to travel.
“But suffice it to say, and I’m so proud to say that almost across the board, I can now just say … we did it,” the governor said.
The conference is organized and produced by Cooper Levenson; Spectrum Gaming Group; Esports Entertainment Group; and Sports Illustrated Sportsbook.
Mayor Marty Small, who kicked off the event, said that between Superstorm Sandy, a city financial crisis, casino bankruptcies, the pandemic and other troubles, people keep writing Atlantic City off.
“This city isn’t going anywhere,” said Small, who stressed that he believes it’s just getting started.
He credited different organizations and stakeholders for working together, which the mayor said is essential to separate themselves from the competition, as well as for conquering the tough economic climate in general.
“Our partnerships are stronger than ever,” he said. “It’s no longer an ‘us versus them’ attitude. We know if we don’t work together, it will be devastating for the city.”
“Atlantic City remains an American – not just New Jersey – an American gem,” said Murphy.
The governor ticked off a number of priorities, initiatives and partnerships regarding the seaside resort and the gaming industry as a whole, including efforts to attract gaming startups to New Jersey as part of broader innovation economy goals, building up the esports sector, and continuing to develop the robust online gaming sector that boomed during the pandemic and generated nearly $1.4 billion in revenue last year.
The original authorization in the law signed in 2013 that allowed online gaming is set to expire in November 2023. Murphy acknowledged legislation working its way through Trenton to extend the authorization through the year 2033. Last month, the measure, Assembly Bill 2190, advanced through an Assembly committee.
“And I want you all to be the first to know that when this bill lands on my desk, I will sign it into law,” said Murphy. “It would be a backward step for us to let this authorization expire. We’ve come so far in welcoming the online gaming industry as a whole to our state as it is creating good jobs in an innovation-driven space.”
Murphy also pointed out the diversification of Atlantic City’s economy and that visitors are doing more than just gambling because of the different offerings available at the city’s nine properties.
“That’s evidenced by the rush of capital investments being made at properties citywide, in hotel rooms, in meeting places, in non-gaming attractions and entertainment and other amenities,” Murphy said. “This speaks to what we all collectively envision for Atlantic City. Yes, this is a local economy driven largely by gaming. But we have also been working diligently with the city through the New Jersey Department of Community Affairs, among others, to make this local economy also more diverse. And the more diverse the offerings of the casino, the more and more folks will come back.”
That development was also stressed by James Plousis, who chairs the New Jersey Casino Control Commission. “The industry has really reinvested in their properties,” Plousis said.
He noted almost 1 million square feet of meeting space being built or renovated as well as more than 15,000 new and renovated hotel rooms, and 300 food/beverage retail outlets being redone or reconditioned.
“Overall, the landscape looks promising. Atlantic City just closed out one of its strongest summers in a decade,” said Murphy. “Visitors are coming back, and they are bringing their money with them. Revenues across the summer increased 9% from last year. Year to date, casino revenues have already surpassed $3 billion.”
But Murphy tempered all the feel-good talk with a dose of reality about the broader economic conditions and challenges at play, such as inflation, supply chains, interest rates, gas prices, a possible recession, and just general uncertainty about what the future holds.
“It’s a tale of two cities right now,” said Murphy, as he noted the very low unemployment rate, strong state revenue collections and the recent series of credit upgrades.
“That all feels good,” said Murphy. “On the other hand, there’s a lot of hurt at the kitchen table.”
Those concerns were at the center of many of the panel discussions as leaders explored challenges and potential solutions.
The keynote and speakers, a group of industry heavy hitters, included James Allen, chairman, Hard Rock International, and CEO, Seminole Gaming; Sherry Amos, principal, Spectrum Gaming Hospitality Group; Bill Miller, CEO, American Gaming Association; Thomas Reeg, CEO, Caesars Entertainment; David Cordish, chairman, The Cordish Cos.; and others from across the gaming industry.
The American Gaming Association’s Industry Outlook found CEOs remain positive about the current business situation and express confidence about future conditions, despite the myriad of economic hurdles in the way. Click here to read more.
The panels examined topics such as which sports betting model is working best; the status and future of gaming from the perspective of leaders; whether gaming is growing responsibly; mergers and acquisitions in the gaming sector, among others. Many of the leaders spoke about the lessons they learned from the pandemic, how they are adapting, and how in, some cases, those adaptations led to more efficiency and even more profit.
“We learned lessons that can’t be unlearned,” said Reeg. “It forced us and gave us the ability to say to our guests that things that used to be viewed as an entitlement, maybe they don’t need them as much as they thought they did,” said Allen. “Do you need a buffet? Should you have a buffet?”
Allen, who made news recently when Hard Rock announced a substantial wage increase for its employees, stressed that investing in people is vital and that increasing wages by $6, $7 or $8 an hour can change both their lifestyle and their quality of life.
“And I think in today’s environment, it’s not just rewarding people when the numbers are great,” said Allen. “It’s being there when times are tough.”
“It’s not enough for us to just sign laws or put in place regulations,” Murphy said. “It’s incumbent upon us to make sure they work for you, for your customers, and for the public. This is the principle to which I remain committed. I think we’ve proven this principle across the first now almost five years in which we’ve worked together to reshape Atlantic City, the experience here, and usher in exciting new opportunities in sports and online gambling.”
Murphy closed his address by emphasizing the progress made but insisting that there is much work left to do, especially given increased national and regional competition, as well as the myriad economic headwinds already in place and coming down the pike.
“It seems to me we have to continue to be obsessed with affordability. In this town and in this collective industry represented here to continue to innovate, and deliver cutting-edge, hugely attractive offerings, and to be laser focused on the stuff we can control,” said Murphy. “This is a fascinating, treacherous time in our world, in our country, I would argue in our state. We want to make sure we come out of this standing tall, strong, with great energy, learning a lot of lessons and having a future that is undeniably good for all of us.”