Golden Nugget Owner Doesn’t Think Atlantic City Can Support Nine Casinos
Recent gaming figures in Atlantic City have been positive, but the Golden Nugget’s owner isn’t having any of it. In an interview with The Press of Atlantic City, Tilman Fertitta said that there are simply too many casinos in the east coast gambling hub. The market is becoming diluted.
“It’s not a nine-casino market, and I don’t understand why nobody realizes that,” he said.
What he is specifically referencing is the opening of both the Ocean Casino Resort and Hard Rock Atlantic City in June of last year. They joined Bally’s, Borgata, Caesars, Golden Nugget, Harrah’s, Resorts, and Tropicana to form a fleet of casino resorts up and down the Boardwalk.
“This is what happened to Atlantic City the first time, and it’s how the casinos got all run down. People didn’t have the money to keep (their properties) new and fresh by putting money back into it,” Fertitta explained. “I think it’s a huge mistake again. It’s a seven-casino market, and when it was seven casinos, everybody was putting money back into the properties. Now, they won’t.”
There were a dozen casinos a few years ago
The ”first time” has to do with the rash of Atlantic City casino closures that were partially the result of an economic downturn and partially the result of market oversaturation. In 2014 alone, four casinos closed:
Two years later, on October 10, 2016, the Trump Taj Mahal also shut its doors.
Revel and the Taj were probably the two headliners of the five. The Revel was meant to compete with the Borgata, built for the jaw-dropping price of $2.4 billion. It was a financial black hole from the start and closed after only about two years. After a messy, contentious auction, it was finally sold to Glenn Straub’s Polo North Country Club for only $82 million.
The Taj was supposed to be Donald Trump’s crowning Atlantic City achievement, but like most everything he touches, it was poorly planned and leveraged to the hilt. It did become a center of poker for east coast grinders, to the point that it was featured in the movie Rounders. Trump’s buddy, Carl Icahn, took over the casino for a while after the Trump Entertainment Resorts exited bankruptcy for the umpteenth time.
During Icahn’s tenure, the UNITE HERE union went on strike, wanting to negotiate the restoration of health and retirement benefits it sacrificed in order for the company to avoid bankruptcy in 2014. Icahn refused to negotiate and blamed the 2016 closure on the union. In reality, he shut down the casino because the state and city did not give him the tax breaks he wanted.
Two casinos resurrected
And so the middle of this decade was a low point for Atlantic City, as the number of casinos was slashed from twelve to just seven (we’re counting Wild Wild West as part of Bally’s, which it is, even though it is sometimes considered a separate casino). Since then, though, Atlantic City has seen a resurgence, thanks to an improved economy and the launch of online gambling in New Jersey. Sports betting, which kicked off last year, has also given the gaming industry a positive jolt.
The Revel and Trump Taj Mahal have changed ownership since their closings and last summer, both reopened under the names Ocean Casino Resort and Hard Rock Hotel & Casino Atlantic City, respectively. The former was originally Ocean Resort Casino, but has since reversed the word order to emphasize the casino part of the property.
Fertitta sees two casinos too many
And while the revival of the two properties was a welcome sight to local residents because of the jobs they created and business they brought to Atlantic City, Tilman Fertitta is not so enthusiastic.
“You could say the market is going up and that we’ve added thousands of jobs, but now every other casino has had to lay off jobs, so I don’t even know how big the net gain is,” he told The Press of Atlantic City. “But now, none of the casinos have the cash flow that they did.”
Fortunately for Fertitta’s Golden Nugget, it is the market leader in online casino gaming, so if the brick-and-mortar part of the business has seen a decline, the online portion has likely made up for it.
Sports betting at the Golden Nugget is looking up, as well. When sports betting was legalized in New Jersey last year, the Golden Nugget was not allowed to take bets on NBA games because Fertitta owns the Houston Rockets. The original draft of the bill locked the Golden Nugget out of sports betting altogether.
But lawmakers recently came to their senses and passed a bill that will permit the Golden Nugget to take NBA wagers with the exception of games involving the Rockets. The Governor signed the bill.
“It will be huge for us,” Fertitta said. “I think we’ll do well and will be a leader just like we are in internet gaming.”