The New Strip on the Atlantic CoastBy Ken Adams, CDC Gaming ReportsOctober 18, 2018 at 7:58 pmThere are 38 casinos located in seven states between Boston and Washington, D. C. The long line of casinos might easily be called a strip, not unlike the Strip. On the Atlantic Strip, the casinos are being built as close to population centers as possible. Nearly all recent legislation has required a casino licensee to build a resort, not just a gambling hall. Legislators believe a resort will require larger investments, will drive increased tourism and have a greater impact on the overall economy than a simple casino-hotel. When a resort is located near a major population center, the price tag is in the billion-dollar range. The newest ones are category killers, or at least they dominate their respective markets.In the last 18 months, three new billion-dollar casino-resorts have opened on the Atlantic City Strip. Resorts World Catskills, 90 miles from New York City, MGM National Harbor, 10 miles from Washington, D. C. and MGM Springfield in Springfield, Massachusetts. Those three have produced some very different results; the latest numbers have MGM National Harbor generating $54.4 million in casino win for September, MGM Springfield won $26.9 million from gamblers for the month and $15.9 million in gross gaming revenue from Resorts World. Each cost a billion dollars or very close to it.Clearly, location rather than cost accounts for the wide disparity in gross gaming revenue. MGM National Harbor has about 700,000 people within a 10 mile radius; MGM Springfield has less than 200,000 and Resorts World far fewer than Springfield. They are each the top revenue generator in their state, but by much less than one might think. Resorts World’s win is 30 percent of the win for the four casinos in New York. Interestingly, Resorts has another property in New York, a racino located in New York City that generated $58.4 million in slots win in September.MGM National Harbor had a 27 percent market share in September, but the gap is narrowing. In June, Live! Casino & Hotel opened a $210 million, 300-room hotel. Live! is 12 miles from the Baltimore Horseshoe and 35 miles from MGM. In September the property’s win was $50.2 million. The property plans another expansion of amenities next year in an effort to compete with MGM and a slowly sinking Horseshoe. The revenue for the Horseshoe in September was $20.6 million; it has decreased every month but two since MGM National Harbor opened in December 2016.MGM Springfield does not really have any in-state competition and won’t before June 2019. Its nearest competitors are the two Indian casinos in Massachusetts, Foxwoods and Mohegan Sun. The slot win for Foxwoods and Mohegan Sun was down 7 percent in September to $85 million as a result of MGM’s entrance into the market. Sadly for those casinos, MGM Springfield is only the latest casino to take their market share; the September 2018 revenue was down 32 percent from September 2008. The plight of Foxwoods, once the largest and most profitable casino in the world is story of the region. Casinos closest to the gamblers have a significant advantage.The Atlantic Strip could easily extend further south and with the possibility of casinos in Virginia, Georgia and Florida. Would-be developers in those three states have to hope legislators will be sensitive to intense competition. If the tax rate and regulatory conditions are not onerous, those cities could be the crown jewels of any corporate casino crown. Adding Atlanta, Miami and Richmond to the list of casino cities would be a strong boost to the industry. One of the five or six giant gaming companies is certain to be chosen for any new casino jurisdiction. Those corporations have the expertise, the financing and the political savvy to negotiate the process. Caesars, Boyd, Penn, Eldorado, Wynn, Hard Rock and MGM can guarantee financing for a billion dollar development. They have the management, design, construction and operational expertise a prospective resort in a one of those cities would require. Also, those corporations can also survive the very long development process that all bidders and license recipients must endure as it will be years before an operator would see any cash flow.The competition will be fierce; based on its successes in the last two years, MGM is in a very favorable position. It certainly will pull out all of the stops in an attempt to put three new cities in its portfolio. Atlanta and Richmond would make MGM the undisputed king of this strip as they strive to be on that other strip in Las Vegas. However, the other corporations will not be sitting on their hands, the prizes are too valuable to stand by and watch MGM gather up the trophies. Regardless of which corporation wins those licenses, the industry has entered a new era. It is an era of mega-corporations, casinos in most of the nation’s largest cities and a mega-strip running the length of the Atlantic Coast.