Why Are Atlantic City Casinos Closing?
Since the beginning of the year, four casinos have shut their doors in Atlantic City. The Atlantic Club shuttered its doors in January. Showboat closed on Aug. 31, Revel went dark on Sept. 2 and Trump Plaza closed on Sept. 16.
Now only eight casinos remain, from a high of 12 in January, and almost 8,000 people are jobless. Meanwhile a fifth casino, Trump Taj Mahal, could close down in November.
So why are so many casinos closing at once?
"If you think back to the correction that took place when the financial markets and the housing market dropped, a lot of these things happen very, very quickly when there's a correction in the market - so I don't think that's terribly unusual," said Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Richard Stockton College of New Jersey.
Posner said anyone who follows the market in Atlantic City and in the region understands there is now a very different landscape when it comes to casino gaming in the mid-Atlantic region.
"There are now 25 casinos in the region. A decade ago the only casinos that existed in this region were in Atlantic City. The casino market transformed from a destination market to a convenience market, and at this point in time it's clear that if all you want to do is gamble, there are places closer to home," Posner said.
And while the decision on exactly when to close varies from casino to casinos, at some point, according to Posner, companies determine that further exposure and participation in the market is not likely to pay off.
"I can't imagine that any business is going to be consulting with another business as to whether they stay open or close. I mean that to me is inconceivable. But anybody that's in business, you've got to show a profit. At some point it has to be profitable venture, otherwise it's not sustainable," Posner said.