Casino developer warns of market saturation

Associated Press

ATLANTIC CITY, N.J.

Casinos are not like Starbucks stores: You really can’t have one on every corner.

That’s the word from David Cordish, whose company is opening a huge, new casino next month in Maryland.

Yet Cordish warns that the expansion of casino gambling can’t go on unchecked forever. A big problem is the attitude of politicians nationwide who view casinos as free money.

“I don’t know how we can control the politicians; they certainly don’t understand the word ‘oversaturation,’” Cordish said Thursday. “They think you can have casinos like Starbucks.”

If that attitude continues, Cordish said, “it’s going to implode on them.”

That sentiment was voiced repeatedly at The East Coast Gaming Congress, a major annual casino-industry conference, which took place this year in the newly opened Revel casino resort in Atlantic City. The $2.4 billion Revel is being counted on to help turn around Atlantic City’s five-year slump. But several experts at the forum said the solution to Atlantic City’s woes is the closure of one or more of its 12 casinos.

“Here in Atlantic City, we have assets for sale that literally nobody wants to buy,” said Gary Loveman, president of Caesars Entertainment, which counts four Atlantic City gambling halls among its 56 casinos. “There is simply too much supply in Atlantic City. The supply doesn’t go away. That’s a very bad thing. The problem here? Nobody ever closes.”

During a panel of Wall Street experts, Andrew Zarnett, managing director of Deutsche Bank Securities, said Revel might hurt, rather than help, Atlantic City’s overall casino market.

“Everybody’s a loser; when you add supply to a market that’s not growing very much, everybody gets cannibalized,” he said. “We need some of this capacity to close and go away. I would have thought that would have happened two years ago, but the properties are still here.”

Zarnett said he doubts any Atlantic City casino will close until they see whether New Jersey will approve Internet gambling and throw the struggling properties a lifeline.