More Atlantic City Casinos could close, according to Moody’s

Last year was especially rough on Atlantic City, with four casinos closing in 2014. This has dropped the number of casinos from 12 to eight, which has somewhat stabilized the market. However, this may not be the end according to Moody’s.

The financial analyst believes that Atlantic City is still in trouble when considering that they face more competition than ever before.

“We expect more casino closures to occur in Atlantic City as some struggle to grow their business and face additional competition,” Moody’s Investors Service noted in a gaming industry report.

Moody’s pointed out that overall Atlantic City revenue fell by 8%. This has caused three more casinos — Bally’s, Caesar’s and Trump Taj Mahal — to be “on the brink” of closing.

“As the number of casinos shrink, some of the remaining casinos have seen revenues increase,” wrote Moody’s. “But we expect increased competition will keep the heat on incumbents, and that number of casinos in Atlantic City will likely continue to shrink.”

Atlantic Club, Showboat, Trump Plaza and Revel all shut down earlier this year. The Revel was a huge disappointment because the $2.4 billion resort was expected to usher in a new era in Atlantic City history. However, after opening in April 2012, Revel closed less than two years later after poor performance.

Given this big failure, it may be a while before another mega-resort opens in the East Coast gambling mecca. This is especially the case when considering that Atlantic City is facing increased regional competition.

Typical Atlantic City feeder states like Maryland, Massachusetts, Pennsylvania and New York now feature casinos. So less of their residents travel to New Jersey to do their gambling.

CNN Money reports that American casino expansion is becoming more common due to states’ needs “to keep more casino tax dollars within state borders.” The end result is that, Atlantic City, which used to be one of the few places where Americans could gamble, has lost some of its mystique.

Previous predictions have stated that the Atlantic City casino market might truly stabilize when only 5-6 casinos are left. This still hasn’t happened yet, meaning Moody’s predictions might come true within the near future.