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Atlantic City Gets Brighter Figures From Non-gambling Activities

Posted on November 1st, 2010

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Atlantic City has been dubbed as the Las Vegas of the East Coast, the Northeast’s gambling Mecca. But with four years of a continued slump in revenues, mainly due to competition from neighboring states and the bad economy, news from the Shore has not been good at all. However, the past quarter has seen the area get some good news: even with the decline of the attendance in the gambling halls of the country’s second largest gambling resort, more people have been spending more money on attractions and activities that do not really involve gambling. Money funneled on meals, hotel rooms, nightclubs and concerts in Atlantic City has increased despite the very dismal figures of the gambling industry. What’s incredible is that the figures for spending on other activities have increased even though the number of people spending has declined. Visitor figures in the 11 casino of Atlantic City have fallen from 34,534 in 2006 to 30,381 last year.

Since 2007, the amount of money that gamblers have spent at card and roulette tables and even slot machines have declined by as much as 23 percent. These figures were gathered for a study by Gaming Industry Observer, published by Spectrum Gaming Group, a casino consulting firm based in Atlantic City. The report did state though, that hotel room spending has increased by as much as 21 percent, while food and drink spending has gone up by 6 percent. Some customers are spending more on non-gambling activities as they are being thrown back into luxury with the popularity of such television shows as “Boardwalk Empire.” Herney Nisimblat, a retiree from Darien, CN, won a promotion from HBO and is spending $19.20 for a straight-razor shave, just like in the old days of the 1920s Prohibition Era. Nisimblat opined, “To me, it brought back nostalgia. I come from Colombia, and my father used to get that when I was a kid. I remember watching him get a shave. It was like a dream to get one myself. I wish I could do it every day.”

Nisimblat, now 69 years old, used to be a marketing director with Colgate-Palmolive is an example of the current profile of Atlantic City visitors. He claimed that although it used to be that he came to Atlantic City every other month in the past years to gamble, these days his list of activities have swelled. He explained, “I’m retired, so now is the time to spend the money I’ve been saving my whole life,” he said. “I love to go out and have a good time. I love the Boardwalk, I love to go shopping, to go to a nice restaurant, and to the casinos. Whatever they’re offering, I’ll do.” People like him a giving the otherwise gloomy picture of the Atlantic City gaming industry some color. As some casinos have resigned themselves to another year of losses, they are currently reconsidering their strategies as they discover that they could not rely on slots and table games anymore.

In 2007, Atlantic City changed its image from being a retiree daytrip destination to a high-rollers paradise. But then, the economy started stalling in 2008. Since then, the casinos have gotten into trouble. Harrah’s Entertainment Inc.’s president of its eastern division operations (with 4 casinos) Don Marrandino, explained, “We’re still the second-biggest gaming market in the country, but when you lose a billion dollars of revenue that’s not coming back, you have to change your business model. That’s what we’re doing.”

Even struggling hotels have benefited from this change. The Atlantic City Hilton, which has been defaulting on its mortgage payments for already more than a year has experienced a 44 percent decline in gambling revenue. However, its hotel revenue is up by 24 percent. Resorts Atlantic City, which has been turned over to lenders after it also ceased paying its mortgages, saw a 4 percent increase in hotel revenue and a 39 percent plunge in gambling receipts. Hotel revenue for the entire city from April to June 2010 has been up by 25 percent compared to the second quarter of 2009. Should this trend continue, then the picture of Atlantic City should not be gloomy as always portrayed.