NJ Governor Throws Struggling Atlantic City Casinos A Curveball

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Atlantic City casino operators were eagerly looking forward to Thursday’s state-approved reopenings after 3½ months of closure due to the COVID-19 pandemic.

As a bonus, indoor restaurants also would be allowed to reopen that day — albeit at 25% capacity. The combination of the two meant some high rollers figured to flock to the casinos for high-end food and drink — plus a smoke in some cases — in between sessions at the live table games.

But late Monday night, Gov. Phil Murphy upended those good feelings when he announced an indefinite hold on indoor dining, drinking, and smoking.

Murphy cited outbreaks across the U.S. in states that may have reopened too soon, as well as social media posts showing that some Jersey Shore bars blatantly flouted the “outdoor dining and drinking only, and with social distancing of six feet” rules over the weekend.

“Unfortunately, the national scene compounded by instances of ‘knucklehead’ behavior here at home are requiring us to hit pause on the restart of indoor dining for the foreseeable future,” said Murphy, using a derogatory term he has used dozens of times during the pandemic.

Asked about a new time frame for reopening, Murphy said, “I don’t think it’s a matter of days, but a matter of weeks. We have enormous sympathy, but the alternative here is worse and unacceptable.

“It’s not a life sentence. We would like to be full-bore open. We’re just not there yet.”

Impact on AC casinos

There are nine Atlantic City casinos in operation, and it’s not clear if all of them would be able to withstand a summer of no food, drink, or smoking.

While online casino gaming in the state is booming, its $85.9 million in revenue in May still was only able to produce 35% of what brick-and-mortar casino plus online casino (plus much larger sports betting dollars) collected in May 2019.

Also, the amount of staff expected to be rehired for the weekend has now dropped from two-thirds of the usual workforce to one-third. And that’s in a city that has a devastating — and state-leading — 33.3% unemployment rate.

One leading union official told The Associated Press, “No booze? No one’s coming. I really don’t even think they should open.”

Murphy said the more than 13,000 COVID-19 deaths in the state — second in the U.S. to New York — weighed heavily on him.

“None of us — none of us — want to go back to that hell,” Murphy said. “We’ve worked too hard to get back to where we are.”

Thursday, Friday reopenings still expected

After a day of scrambling on Tuesday, the casinos made their plans this way:

Ocean Casino Resort, Golden Nugget, Tropicana, Resorts, and Hard Rock decided to reopen on Thursday as scheduled.

Ocean and Tropicana are scheduled to reopen at 8 a.m. The other opening times are unclear, but pent-up consumer demand and an urgent need for revenue by the casinos strongly suggest reopenings before noon.

Harrah’s, Caesars, and Bally’s — all Caesars Entertainment properties — have elected to reopen on Friday.

Meanwhile, Borgata — which had planned a modest “friends and family” July 4 weekend reopening and then a more full-scale revival on July 12 — now has no planned opening date. That’s by far the leading land-based casino in the city, so the state will experience a noticeable negative tax revenue impact from that decision.

“Our guests expect a special experience when they come to our property and if we cannot provide that level of hospitality, we feel it best that we remain closed until such time that the governor lets us know it is safe to offer food and beverage,” the company said in a statement. “The health and safety of our employees and guests are at the center of all that we do, and we regret that, at this time, we are unable to welcome back the thousands of employees who are anxious to return to work. We look forward to a time when it is safe to welcome everyone back.”

No smoking an overlooked issue

Atlantic City tried a smoking ban in 2008,which was curious timing in the face of a worldwide economic collapse and in a second full year of steep casino revenue declines thanks to legal casinos opening up in 2006 in Pennsylvania and New York.

The ban lasted less than a month before it was reversed. Smoking soon was allowed again — but only in very limited areas.

The multi-billion dollar Revel casino opened in 2012 as a completely smoke-free casino, but that ban only lasted one year, and was considered a contributing factor in a pair of bankruptcies and the closure of the casino in 2014.

Photo by Shutterstock.com

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John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.

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