A Wall Street analyst has predicted that as many as half of Atlantic City's eight casinos could be forced to close if voters approve two new casinos just outside New York City in November.
A Monmouth University poll released last week shows voters evenly divided on whether to authorise construction of two new casinos near New York City. Hours later, Fitch Ratings predicted that one to four Atlantic City casinos could be forced to shut down if new casinos are built in northern New Jersey.
That prediction is similar to one made by Resorts Casino Hotel president Mark Giannantonio at a major gambling conference last month. He said three to five of his city's casinos could go under if faced with in-state competition.
In its report, Fitch listed the Trump's Taj Mahal, Resorts and the Golden Nugget as the most vulnerable. It also said Bally's faces an uncertain future.
The firm said a 25 per cent decline in gambling revenue would wipe out the Golden Nugget's operating income before management fees. It also said a decline of 10 per cent in gambling revenue would put the Taj Mahal at risk, while a decline of 20 per cent would imperil Resorts.
If the referendum does pass, Fitch predicted it would take four years for a new casino to open closer to New York. But others have predicted a shorter time frame, particularly at the Meadowlands Racetrack, where operator Jeff Gural and Hard Rock International propose a casino at the existing track complex. The other leading proposal is for Jersey City, where footwear magnate Paul Fireman proposes a casino costing up to $5bn.
The Monmouth poll found 48 per cent of voters in favour of the northern New Jersey casinos and 48 per cent opposed. The telephone poll of 806 adults conducted from May 23 to 27 has a margin of error of 3.7 percentage points.
The poll also found that most voters believe expanding casinos to other parts of the state will hurt Atlantic City. The new casinos would have to contribute part of their revenues to help Atlantic City.
Respondents said that expanding casino gambling will bring some economic benefits to the state overall; 12 per cent said it will help the state's economy a great deal, while 42 per cent believe it will help somewhat.
