Resorts, Tropicana And Golden Nugget Are The Fastest Growing Atlantic City Casinos

Atlantic City’s Lesser Known Brands Are The Muscle Behind Revitalization Efforts

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The fastest growing Atlantic City casinos aren’t the usual suspects like Borgata and Caesars, but the boardwalk city’s often overlooked smaller brands.

These pint-sized casinos also happen to be the fastest and most aggressive movers on the NJ online casino front.

Who’s leading the charge?

Since 2014, three AC properties have grown their average monthly land-based gaming revenue by approximately 40 percent or more.

They are:

Comparatively, the Caesars conglomerate only saw its revenue climb 4.77 percent over an equivalent span. (That currently consists of Bally’s, Harrah’s, and Caesars.)

At 18.05 percent, Borgata fared somewhat better. But its percentage growth margins was still less than half of the industry’s top performers. Although in fairness, on a dollar-per-dollar basis, the overwhelming market share leader did experience the greatest uptick.

A comparison of January through April revenue for this year and last reveals that, so far, 2017 has been the best year yet for two of Atlantic City’s lesser known brands:

Tropicana has done so well of late that it’s threatening to shed its middling status in favor to top-tier stardom.

So far in 2017, the Trop has generated more revenue from land-based gambling than all but the Borgata and Harrah’s. And even Harrah’s is only averaging just over $400,000 per month more than the rejuvenated Tropicana.

Casinos deserve upticks

There’s little wondering why Atlantic City’s smaller brands have thrived in the now consolidated market.

First and foremost, all three have adhered by the concept that in order to make money, you have to spend money.

  • Tropicana AC has poured $90 million into renovation efforts over the past couple of years. Recent improvements include redesigned hotel rooms, new nightclubs and retail outlets, and the launch of a new high-limit slot area.
  • Resorts AC hasn’t exactly been resting on its laurels either. The industry’s tiniest casino invested $70 million into the construction of a Margaritaville complex, food court and retail area in 2013. This was followed in 2016 by a $20 million investment in its run-down hotel rooms.
  • When Landry’s relaunched the old Trump Marina as Golden Nugget AC, it hardly resembled the old casino. That’s because it received a $150 million facelift prior to opening.

The explosive growth Golden Nugget has enjoyed since launching in 2012 bodes well for the Hard Rock AC, which will be taking a similar angle. Hard Rock is committing $375 million to the old Trump Taj Mahal before flipping over the open sign in summer 2018.

AC’s smaller casinos have also benefitted from the closure of several properties over the course of the past year. Tropicana and Resorts in particular likely generated a healthy number of new sign-ups from the closures, due to their proximity to the defunct properties, and targeted marketing efforts.

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Smaller brands dominate online

In addition to growing their land-based properties, Atlantic City’s smaller casinos are the biggest movers on the online gambling front, and are currently the nascent industry’s highest revenue generators.

As impressive as their land-based only growth is, when online gambling is factored in, their ascent comes off as nothing short of awe-inspiring.

Since 2014, Tropicana AC has grown its total gaming revenue by a staggering 45.9 percent. Resorts and Golden Nugget have done one better, with growth margins of 79.7 percent and 78 percent, respectively, in the past three years.

By contrast, while online gambling has had a complementary impact on Borgata and Caesars revenue, they haven’t had much success growing their online verticals. That said, their potential for growth was restricted. Both brands got off to a very fast start when the industry went live in November 2013.

The above chart also suggests the following:

  • Online gambling is always complementary to land-based. But it’s even more complementary to brands that put greater stock in their online products. Tropicana, Resorts and Golden Nugget have all done this.
  • Smaller brands are more incentivized to focus on online casinos. Online revenue can potentially comprise a sizable percentage of their total gaming revenue. That doesn’t compromise land-based growth.
  • Online is effectively a level playing field. Smaller brands are not restricted by the size of their casino floors, or the number of hotel rooms and amenities.

Given this, it’s little wonder why prominent brands in states currently considering online gambling legislation (Pennsylvania in particular) are OK with the status quo, while lesser brands are avid proponents of legalization.

In either case, it looks as though Atlantic City’s smaller brands could be the catalysts behind a potential boom. That’s largely thanks to their performance online.

- Robert DellaFave is a game designer and avid poker player. He writes for several publications centered on legal US online poker and the regulated online gambling industries in New Jersey and Pennsylvania.
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