Wednesday, July 23, 2014

The Changing Face of Atlantic City's Boardwalk


A sign of the times in picturesque Atlantic City, New Jersey: 
massive casino closings.

As of July 23, 2oi4, Four huge casinos are either closed down already, or scheduled to shutter in September, this year.

 Lovingly lifted from Philly.com:  
ATLANTIC CITY - This resort faces the prospect of having four major vacancies on its famed Boardwalk come mid-September.
The grim reality sank in July 14 when Trump Plaza issued layoff notices and targeted Sept. 16 as the date to cease operating as a casino.

Perception is reality in tourism, experts say, and the Boardwalk is synonymous with Atlantic City. How will four hulking, empty buildings sit with visitors - especially at night - and will they impede tourism when Atlantic City needs it the most?
 
That raises both eyebrows and serious questions for other Casino operations, across our Beleaguered States of America.  The eyebrows, anyone can understand:  Why, HOW does a casino ever close down?? 
"They got all th' bankroll that we had," and similar sentiments.

Ultimately, it comes down to the U.S. Economy, and that part of the U.S. economy focused in and around the casinos, and the most common patrons who gamble frequently, not so much on the vacationers coming to Atlantic City, or to Las Vegas, Nevada.

When the main source of disposable (gambling) income begins drying  up, thanks to state' and national economic trends, so do the businesses and the jobs and the security provided thereby, and by extension, yet other businesses, and other jobs.  In New Jersey and in New York, the average Joe and Joann are now struggling to just put food on their tables.

The very same type of casino struggles may begin to appear soon in Vegas:  
With nearby California witnessing businesses and corporations closing or moving elsewhere, laying off hundreds or thousands of employees, and similar situations happening in nearby Oregon and Washington state, things do NOT look rosy for large, Las Vegas casino operations, top-heavy with steep overhead expenses.



But what about Indian Casinos? 
Ahh, my specialty.

Indian casinos, either in or near, or both, populations which are presently, relatively, unaffected by business downturn, will be resilient, to any extent like we see in Atlantic City, NJ.

But there will be indications to watch for.
In states like Mississippi and New Mexico, Indian casinos 
have become a bell weather:  Should regional business and income drop more than the present level (already Near the break even point), then they too may close down
The small Indian casinos in California are already feeling the severe pinch of economic downturn, I hear; Indian casinos in New York and Michigan too.

In all honesty, I cannot report any "severe" drop yet here in Oklahoma, at the Indian casinos which I audit.  And likewise, I do not hear of problems from friends, associates who, for the Oklahoma Tax Comm., audit other Indian casinos statewide.

Why?
Because of our proximity to wealthier 'guests', gamblers who reside and work in prosperous states, states like Texas, Oklahoma, Arkansas, Missouri and Kansas, where the state economies are still afloat in deep waters.

Everyone knows that I used to be a Choctaw Casino manager in McAlester, OK., then hired as a casino auditor by the State of OK...
I still have access to the actual numbers.  While the 19 casinos in my area are still doing well, there are only mild fears for the future.  
They mostly forecast a modest downturn for the next 8 to 18 months in income, manageable losses to their profit margins.
Nothing to fear, like a casino closing through 2016.
What I am trying to say here is, it all boils down to a state's, a region's economy, which in turn depends upon the state/region's leadership in both the capitol and Federally.

When the government is blue, so will be you.  Sooner than you think.

5 comments:

Mike said...

"When the government is blue, so will be you."

Awesome little rhyme. I think I'll use that as a signature in some of my forums.

I've never been gambling; my folks used to fly to Vegas and Elko for weekend trips. I have friends and neighbors who go on day trips to Clinton and I hear the radio spots for Winstar.

I'd think that casinos would be a reliable indicator of a region's financial health - people are always going to gamble but when the business drops off, you have to figure disposable income is scarce.

Annoys me about Trump - I don't care about him in the least,but he got the land for his casino by eminent domain. If he has to sell/declare bankruptcy, then a portion of the settlement should go to those whose land was taken. Sure, they were paid but most didn't want to sell and were forced to. I hate it when people associate him with conservatives.

The Local Malcontent said...

You make such a valid, salient point Mike, One I'd never before thought of...
and I'd have to agree that former land owners, after creditors and share holders in TrumpEnterprises, should benefit,

IFF it goes that far. I'm hoping that they do not fold in AC.

Mike said...

Speaking of casinos, I sort of had it out w/ a fellow Texan in another forum- we were discussing the Texas Lottery and school finance and he came up with this bit of information:

"...the Chickasaw Nation gambling casino in Oklahoma donated $50,000 to Greg Abbott's campaign for governor."

He's all butthurt because he doesn't think that's kosher. I don't particularly LIKE it, but certainly understand it. If it's true, then I suspect they're only looking out for their own interests, perhaps not wanting Texas to legalize casino gambling...trying to purchase a little influence later on down the road. -GASP - That's never happened before in politics! -wink- I'll have to do some research on it to find out if it's true and then I can form a more informed opinion on it.

Much ado about nothing, in any case. Abortion Barbie has campaign donations pouring in from abortion rights activists from all over the country. No matter how you look at it, gambling money isn't nearly as tainted as that....certainly not as evil, as far as sins are concerned.

The Local Malcontent said...

Interesting bit of news, there.
so I Google'd "Greg Abbott donor list", and found there that "Tribal Governments" have given a total of $120,000 to him.
I think you'd be correct as to their reasons, Mike. -wink-

The Local Malcontent said...

lastly, this~ which surprised even me: From opensecrets.org, in Oklahoma, the Chickasaw Nation is the 4th largest political contributor. Choctaw Nation is #6; Cherokee Nation, #10.
Fascinating, where all our money is going. Thanks again, buddy.