Despite little damage, rebound may be slow from five-day closing
San Francisco, CA -- (SBWIRE) -- 11/16/2012 -- Five days after Superstorm Sandy forced them to close, all but two of Atlantic City’s 12 waterside casinos had reopened for business, and the remaining gambling sites were scheduled to reopen within the next few days.
First back in business was the Golden Nugget. It re-opened by noon on Friday, November 2, two hours after Gov. Chris Christie gave the go-ahead and re-opened roads into the town, which had been under an evacuation order since October 28.
It marked only the fourth time in the state’s 34 years of legal casino gambling that the casinos were been forced to close. Last year, Hurricane Irene closed Atlantic City casinos for three days during a prime summer weekend, costing an estimated $45 million in lost business. Casinos were also shuttered in 1985 for Hurricane Gloria, and in 2006, due to a state government shutdown.
Although Sandy made landfall with hurricane-force winds just a few miles away from Atlantic City on Monday evening, the casinos suffered little physical damage. Parts of the city were less fortunate, however. Dunes running along the Boardwalk were flattened, and flooding was widespread. An old section of the Boardwalk away from the casino district collapsed into the ocean, with pieces winding up on a city road.
Unlike past closures, this time business at the casinos did not immediately rebound. About half of Atlantic City’s gamblers come from New York or New Jersey, where many areas saw greater damage from Sandy. Adding to the problems were gasoline shortages and areas still experiencing power outages or closed roads.
Moody’s Investors Service predicts the storm will take its greatest financial toll on Atlantic City casinos and electric power companies in New York and New Jersey. A Moody’s report forecasts Atlantic City casinos’ earnings over the next two quarters will fall at least 25%, and perhaps by as much as 50%. Tropicana CEO Tony Rodio, who is also president of the Casino Association of New Jersey, downplays that estimate, but says city casinos averaged combined losses of $5 million for each day of this year’s closing.
Even before the storm hit, Atlantic City gambling revenues for the first nine months of this year were down 4.8% from the same period last year. Gambling revenues – about $3.3 billion last year -- have been declining over the last six years, falling almost $2 billion, due to the weak economy and new competition from gambling in neighboring states.
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