A.C. Casinos Closed Till Further Notice

 Now all 12 casinos are closed, a first in the city’s 28 years of legalized gambling.

The state has been working without a budget since Saturday and all casinos were ordered closed as of 8:00 am this morning. At this time both sides are about $1 billion apart in negotiations, which would allow the budget deal to be signed and get the dice rolling once again.

The republican governor Jon Corzine is looking to increase state sales tax from six to seven percent to help close a $4.5 billion budget deficit while democratic leaders are resisting this new tax. The standoff has caused all beaches, parks and museums to close as well as the casinos.

Even though the casinos bring the state about $1.3 million a day in taxes – 8% of all gaming revenue – he does not feel the 190 Casino Control Commission employees can or should be deemed “essential personnel.” Since they are not around to monitor the cash moving through the casino, all bets are off.

“In particular, I have no authority nor is there any law to support the notion that casino inspectors are essential state employees, as has sometimes been suggested. Nor would it be legal or appropriate in a world where we have to protect the public from a homeland security context, where we need to protect people from violence in our streets to assign state troopers as casino regulators,” Corzine said to the NJ state legislature this morning. “My hands are tied.”

In calls to several casinos in the region, onlinecasinocrawler.com determined people are canceling their hotel reservations and choosing not to come to the city if gaming is not an available option.

The casinos themselves will lose about $16 million each day the casinos are closed not only on the gaming floor but for associated amenities which will not be used such as hotels, restaurants, bars, retail outlets and nightclubs. 

Last year July proved to be the busiest month at the casinos, so this closure comes at the most inopportune time. According to the South Jersey Transportation Authority, nearly 35 million visitors traveled to Atlantic City in 2005 – a 5.1 percent increase over 2004, and a record number overall.



A report issued by Bloomberg News this morning noted Trump Entertainment will lose up to $5 million a day in gaming revenue. Trump owns a trip of properties in the city including Trump Taj Mahal and Trump Plaza. 

``We are definitely starting to feel the impact,\'\' said Chief Operating Officer Mark Juliano.

Casino companies with properties in Atlantic City are all trading down today. As of 1:30 PM EST Trump Entertainment  (NYSE: TRMP) was down a whopping 5.23% to 19.22, while Harrah’s Entertainment (NYSE:HET), which owns its namesake as well as Caesars, Showboat and Wild Wild West was trading down $1.69% to 69.31.

The closure came at a particularly bad time for MGM Mirage Corporation (NYSE:MGM) and Boyd Gaming (NYSE:BYD), which opened a $200 million expansion of their joint venture Borgata last Friday.  MGM was down 1.59% to $40.18, while Boyd took a deeper hit and shed 2.11% of its value to $39.05.

Meanwhile, it looks as if Mohegan Sun in Connecticut is benefiting from the Atlantic City closure.

“Mohegan Sun is already seeing an uptick in business based on the casino shutdown in New Jersey today,’ said Mitchell Grossinger Etess, President and CEO, Mohegan Sun. “We have noticed an increase in the number of buses and in their load factors since early this morning. That trend is likely to gain momentum as the New Jersey budget stalemate continues.”


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