Revenue figures for January are showing Atlantic City casinos could be in for a challenging year; new slot parlors in Pennsylvania, new smoking regulations and the closing of the Sands have all been cited as reasons revenue dropped almost 3%.
Even more worrisome, the Associated Press is reporting, is a 7.2% drop in slots revenue, with two new Philadelphia-area slots parlors drawing business away from the Atlantic City market.
"There will be an impact, no doubt," Carlos Tolosa, eastern division president for Harrah's Entertainment Inc. told AP. "The Pennsylvania slots parlors will certainly cause competition. In the past, people just came to Atlantic City."
Casino revenue in 2006 totaled $5.2 billion, up 4% from the year before, but industry experts are predicting anywhere between a 1-5% decline for 2007, which will have a dramatic effect on both the industry and the state of New Jersey, which relies heavily on casino taxes.
The decline is expected to be temporary however, with Atlantic City casinos recognizing a boost in added amenities will be needed to draw people further from their homes, and are making plans to step up their offerings.
Three casinos are adding 2,500 hotel rooms over the next several years, and many companies are diversifying their offerings to become less gaming-centric.
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