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Atlantic City Casino Reform, Internet Gambling Won’t Work Claims Moody’s

Written by:
Aaron Goldstein
Published on:
Nov/29/2010
Atlantic City

Atlantic City, the US second biggest legalized gambling destination, is in serious trouble these days and desperate.  That was highlighted a few weeks ago when Atlantic City's casinos reported a take of 12.3 percent less from gamblers in October than they did a year ago.  AC has seen declines for the past four years. 

New Jersey legislators are considering measures that would drastically reform the struggling gambling Mecca. Such legislation would allow smaller boutique-style casinos with a minimum of 200 rooms to encourage new development. Lawmakers are also considering bills to legalize sports betting and online gambling, including poker, based from servers inside Atlantic City casinos.

Wall Street ratings firm Moody’s says gaming revenue will simply go “in one poker and out the other.”

To me, doing nothing is not an option,” said state Sen. Jim Whelan, D-Atlantic. “Atlantic City needs new product for the tourism, entertainment and gaming industry. If you don’t give the public new product, you’ll continue to slide backwards.”

Moody’s, however, claims that the smaller casinos would just serve to cannibalize business from existing operators while Internet gambling would ignite “a casino arms race” with competitors in neighboring states.  They also suggest that a federal ban on Internet gambling will make legalization in the state difficult. 

“If the proposals survive legal challenges, we do not believe neighboring states would sit still,” the report said. “New York, Pennsylvania and Maryland are likely to embark on a casino arms race, moving to legalize both sports betting and Internet gambling as a way to protect operators such as Yonkers Racing Corp. in New York and Mohegan Tribal Gaming Authority in Pennsylvania.”

The report added:

“We do not believe Internet gambling and sports betting will grow the overall market because consumers will continue to feel pressure from economic forces such as high unemployment for some time,” the report said. “We expect revenue would go in one pocket and out the other as gaming companies use different forms of gambling to vie for the same customer base.”

- Aaron Goldstein, Gambling911.com

Business/Financial News

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