For the past two decades, Atlantic City’s casino industry has been under siege from gaming competition in neighboring states.
The Southern New Jersey seaside resort, where saltwater taffy was created in the late 1800s, which thumbed its nose at Prohibition in the 1920s and was the inspiration for the board game Monopoly, once owned the monopoly for casinos in the East.
But starting in the mid-1990s, Pennsylvania, Delaware, Maryland, Ohio, West Virginia and New York legalized gaming. The competition, combined with the recession, took away business and caused Atlantic City’s annual casino revenues to fall more than 41 percent between 2006 and 2012.
A comprehensive reform package pushed by Gov. Chris Christie in 2011 that created the Atlantic City Tourism District and focused new attention on boosting the city’s 12 hotel-casinos — nine on the famous Boardwalk and three in the Marina district — was just beginning to take hold in October.
As chief regulator for New Jersey’s struggling casino industry, Matthew Levinson has an interesting balancing act.
The Casino Control Commission must ensure the market is free of corruption. At the same time, turning away potential investment could be viewed as counterproductive.
Levinson, 33, was appointed to a five-year term as the commission’s seventh chairman in August by Gov. Chris Christie.
In less than eight months on the job, he has experienced the gaming market’s financial ebbs and flows, the weeklong closure of casinos in October because of Superstorm Sandy, the emergence of online gaming giant PokerStars as buyer of a struggling Boardwalk casino, and the application of MGM Resorts International to regain its gaming license that it surrendered in 2010 after a stipulated agreement with the Division of Gaming Enforcement.
Also, New Jersey lawmakers approved legislation allowing Atlantic City casinos to offer Internet gaming, and Christie has pushed the casinos to allow sports wagering, a move being fought in federal court.
As a former dealer and pit boss on the Boardwalk, Mayor Lorenzo Langford is committed to seeing the city’s casino industry recover, despite his well-publicized disputes with New Jersey Gov. Chris Christie over reforms implemented by the state that the mayor says cut him and other city leaders out of the process.
Langford, Atlantic City’s mayor since 2002, was critical of Christie’s reform package that was passed by state lawmakers in 2011 and put authority over the city’s 12 casinos under the state through a newly created tourism district.
In an interview last Friday in his seventh-floor City Hall conference room, Langford said the first two years of Christie’s planned five-year program haven’t shown any notable improvements.
“The numbers don’t lie,” Langford said, citing gaming revenue statistics that showed declines of 6.9 percent in 2011 and 8 percent in 2012. Atlantic City tourism and gaming leaders, however, cite upticks in nongaming areas, such as luxury tax collections, sales taxes and occupied hotel room nights.
Putting a 24-hour casino in every home comes with great responsibility. Ensuring a safe, responsible gambling experience should be of paramount importance. Online gambling companies talk incessantly about revenue, but it is everyone’s responsibility–from regulatory bodies to operators, from governments to the citizens themselves–to require that all proper consumer protections and safeguards are in place before online gambling can go live. It is imperative that all stakeholders in online gambling be well versed not just in its benefits but in its pitfalls as well.
Perhaps one of the most dramatic illustrations of what happens when a gaming company puts revenue before responsibility is the case of Terrance Watanabe who is reported to have lost most of his personal fortune recklessly gambling in Las Vegas. According to an article in the Wall Street Journal published December 5, 2009, “During a year-long gambling binge at the Caesars Palace and Rio casinos in 2007, Terrance Watanabe managed to lose nearly $127 million. The run is believed to be one of the biggest losing streaks by an individual in Las Vegas history.” While Steve Wynn is reported to have barred Watanabe from his casino for compulsive gambling, Harrah’s Entertainment Inc. welcomed him and derived 5.6% of its Las Vegas gambling revenue from him that year.
This case showed such an egregious lack of sound business judgment on the part of Harrah’s, now Caesars Entertainment, that the company was fined $225,000 by New Jersey regulators in March of this year. Gary Thompson, Director of Corporate Communications for Caesars Entertainment said, “Because of the confidential settlement agreement we reached with Watanabe, neither he nor we can make any official comment.” However, he points out that Caesars hired an outside agency to investigate the situation and made procedural changes deemed necessary to prevent recurrences.
With its plans to legalize sports gambling held up in federal court, New Jersey is allowing casinos to offer daily fantasy games as an alternative.
The states Division of Gaming Enforcement has published regulations establishing standards for casinos to offer fantasy sports tournaments starting April 22. The casinos can charge patrons an entry fee and pay out winnings through the casino cage, but the activity is not considered gambling.
Fantasy sports tournaments are contests in which participants create and manage teams, made up of individual players from real teams, which compete against other fantasy teams based on statistics that players generate during real games.
It’s too early to tell how these fantasy games will affect sports book operators in Las Vegas.
“I’ve read the regulations and need to digest them to see what the opportunities look like,” said Joe Asher, CEO of Las Vegas-based William Hill U.S., which operates 160 sports books and kiosks statewide and is the risk manager for the Delaware lotterys parlay bets on National Football League games. “But obviously its a step in the right direction.”
Approval of Internet gaming bills in Nevada and New Jersey less than a week apart helped fuel investors’ interest in the gaming industry during the last half of February.
The largest beneficiary was Caesars Entertainment Corp.
Nevada and New Jersey began implementing online gaming websites directed at customers gambling on computers or mobile devices within state borders.
Gov. Brian Sandoval signed Nevada’s interactive gaming bill Feb. 21 after less than one day of debate. Not to be outdone, New Jersey Gov. Chris Christie signed his state’s online gaming bill Tuesday after state lawmakers approved changes suggested by the governor when he vetoed the initial legislation.
Caesars owns four of Atlantic City’s 12 casinos. In Las Vegas, Caesars operates 10 casinos on or near the Strip.
But the company also owns the popular World Series of Poker.
The gaming market has seemingly been covered by dark clouds for much of the past six years. Last week’s announcement that Revel, the Boardwalk’s newest resort, was filing for bankruptcy less than a year after opening, didn’t shock anyone.
Bad news has become expected.
Atlantic City gaming revenues have declined more than 40 percent over the last six years. The Boardwalk suffered through labor strife, competition from resorts in neighboring states, casino closures, stalled investments and the recession.
When Hurricane Sandy washed ashore in October, shutting down portions of the Boardwalk for as long as to a week, several analysts quietly wondered whether the freakish storm was a warning sign from above.
, who will step down in June after 18 years as president and CEO of the American Gaming Association, said Wednesday he believes a comprehensive federal bill legalizing online poker will be brought back to Capitol Hill this year.
Fahrenkopf expects Rep. Joe Barton, R-Texas, to reintroduce an Internet poker-only bill in the House. Barton has tried before but failed to garner enough support in the House to pass an online poker bill.
Senate Majority Leader Harry Reid, D-Nev., and former Sen. Jon Kyl, R-Ariz., were working on a bill last year, but it never materialized, much to the disappointment of Fahrenkopf and other gaming industry leaders.
“I wouldn’t be surprised if a new bill was introduced in this session,” Fahrenkopf told gaming regulators and executives during a question-and-answer session at the 2013 iGaming North America Conference at Planet Hollywood Resorts.
He said the association was “still hopeful something will get done,” but with Kyl’s retirement they are working to “find a conservative Republican from a nongaming state” to support a federal bill legalizing online poker.
Amazing how fast the system can work when they want it.
Opinions vary about the impact of the new law including how soon and how effective the systems will be without opening up their games to other states. Success will depend on the size, diversity, etc of the player base and this law allows Nevada to negotiate with other states to offer internet poker. Even more companies are now lining up in Nevada to get in the game and hopefully other states follow along.
Smarter people than myself will be posting here soon with their thoughts.
Remi Castaignon €770,000 – EPT Deauville
Michael Mizrachi $101,267 – WSOP Circuit South Africa
Tyler Patterson $19,080 – 2013 LAPC NLHE Escalator
Big tournaments finished this weekend all over the planet, from Europe to South Africa and across the US. Michael “The Grinder” Mizrachi was already having pretty nice results over the last 12 months including a nearly $1.5 million victory in the 2012 WSOP Poker Players Championship. Now he can add WSOP Circuit ring winner to his resume after winning the 116-player Main Event at the Emerald Casino in South Africa.
Remi Castaignon is the latest EPT Champion for what is apparently his first tournament cash ever with a victory in the EPT Deauville Main Event. €770,000 is a fine way to get his first entry on HendonMob and it looks like he cruised to the win after entering the final table with 40% of the chips in play.
The 2013 LAPC continues to chug along with their preliminary events pulling in good numbers for the Savage structured grind. Plenty of big names are making their way to final tables including McLean Karr, Bryan Devonshire, Matt Affleck, and Tyler Patterson who managed a win along with the traditional ugly, 500 pound trophy. Elsewhere in the world, the WPT Seminole Hard Rock will play down to their champion in a few days with Matt Salsberg once again in the running with 36 players remaining.
Tweet of the Day – Mizrachi wins and Andrew Felman reminded to remind himself that everyone forgets The Grinder. Perhaps people could start giving the man his props now?
I won the Main Event @emeraldpoker@wsoptd @wsopLove you South Africa.Ty every 1.Every 1 Here is Great.Thanks again !!
Poker / By Alex Outhred – Hey, look who has a poker strategy article in the world renown Buffalo News! Good friend, and one of the good guys, Alex Outhred. (Part congrats, part needle, all complimentary)
Mike Matusow $750,000 – National Heads-Up Poker Championship
Andrew Robl $1,000,000 – Aussie Millions $100,000 Challenge
The National Heads-Up Poker Championship final was like a flashback to the olden days* with a practically made-for-TV final match between Phil Hellmuth and Mike Matusow. The two of them advanced to the final after defeating Scott Seiver and Joe “Don’t call me Sebok” Serock. Many questioned the Matusow invitation but he showed some of his old form when he earned his victory. He hit a nice little naked flush draw to defeat the 13-time WSOP champion Hellmuth. This is the 3rd biggest cash of Matusow’s career after his $1,000,000 hits for the 2005 WSOP Main Event final table and Tournament of Champions victory.
On the other side of the planet, the Aussie Millions Main Event is underway but not before Andrew Robl beat a small but extremely talented field in the $100,000 Challenge to earn a cool million. The tournament was of the re-entry variety but of the 21 players, Robl was the only one to take advantage of the option and it worked out successfully. Igor Kurganov (2nd), Masa Kagawa (3rd), and Dan Shak (4th) were the other three who cashed in the even.
* – Not really that long ago, but it feels like a generation ago
Joseph Stiers $318,104 – Borgata Winter Poker Open NLHE
Aaron Massey $57,326 – Borgata Winter Poker Open NLHE Re-entry
Jason Bundy $29,000 – 2013 LAPC NLHE Double Stack
The two big festivals on opposite coasts are fully underway with the Borgata Winter Poker Open in absolutely frigid Atlantic City and the LAPC at the stylish Commerce Casino. The Borgata continues to draw great numbers despite less than ideal weather including the first event which nearly doubled it’s $1,000,000 guarantee. Joseph Stiers won the event to multiply his career earnings by 100.
In other news, the National Heads-Up Poker Championship had a sudden change in the field when Daniel “20 years too old to be called Kid Poker” Negreanu withdrew from the tournament. David “Doc” Sands was a top snub on the original list but will now take Negreanu’s spot. The tournament kicks off on January 24th.
Meet the 2013 NHUPC Snubs – Andrew Feldman has his list of the NHUPC snubs which is lead by David “Doc” Sands but includes Tom Marchese who somehow managed to slip my mind. I like the idea of a Brandon Cantu/Jon Aguiar match, The Whine Bowl 2013.
WSOP VIDEO: Cover Story with Kara Scott – The Global Poker Index Awards were presented last night and the only winner worth noting would be Kara Scott for Poker Personality of the Year. So today’s video is from Bluff Magazine this summer during the WSOP.
Wall Street is sold on the parent company of online gaming giant PokerStars taking ownership of a downtrodden casino in Atlantic City.
The question that remains is whether or not New Jersey gaming regulators will sign off on the deal.
On Tuesday, Isle of Man-based The Rational Group, which owns PokerStars and Full Tilt Poker, filed papers with the New Jersey Division of Gaming Enforcement, seeking approval to purchase the Atlantic Club Casino Hotel from Resorts International Holdings.
There is now a 90-day period in which the Division of Gaming Enforcement will conduct an investigation and then report its findings to the New Jersey Casino Control Commission. The casino commission will then have 30 days to hold hearings and ultimately make a determination on suitability.
Last week’s news that November gaming revenues at Atlantic City’s 12 casinos suffered their worst single-month decline in the New Jersey community’s 34-year history of legalized gaming had to be the low point.
Or was it?
Granted, Superstorm Sandy, which hit the region in late October, caused most of Atlantic City’s casinos to stay closed between Oct. 28 and Nov. 5.
Infrastructure impairments hindered travel from key feeder markets while residents of the Atlantic City – many of whom are employed in the casinos – were dealing with their own property damages.
In November, casino revenues fell 27.9 percent, which followed a 19.9 percent drop in October.
Not all the declines can be attributed to the storm.