New Jersey Gov. Chris Christie's proposal to allow gambling on sports at casinos and racetracks is unlikely to help the struggling Atlantic City government, analysts said.
"In all, we think it's unlikely that sports betting will be the jackpot that rejuvenates Atlantic City," said Fitch Ratings' director of gaming, lodging and leisure, Alex Bumazhny.
In making his sports gambling announcement, Christie noted that in 2013 a federal court had enforced a federal law that barred the state from licensing or regulating sports wagering. However, the judge in that case had left open the door for the state to allow sports wagering, the governor's office said in a press release.
On Monday the governor said he would allow sports gambling at casinos and racetracks. He also filed a motion in federal court to the judge who had left the open door to clarify or modify his 2013 injunction.
"The legalization of sports betting in New Jersey will not be a lifeline for Atlantic City casinos that are already struggling, although it's potentially more impactful for racetracks," Bumazhny said. "As we've seen in Las Vegas, sports book revenues as a percentage of total casino revenue remains small. Despite reassurances from the state, we expect casinos will be skeptical to invest in a sports book as sports betting remains illegal based on federal law."
Evercore Wealth Management director of municipal research Howard Cure said that sports betting could bring some people to Atlantic City. However, it would not diversify the city's offerings away from gambling. Furthermore, he said its legal status is cloudy.
The city's casinos will likely face competition in the near future from casinos opening in New York State, Cure said. The contraction of the city's gambling industry is not necessarily over, he said.
On Sept. 8 Christie held a meeting of state and local leaders on Atlantic City. He has a committee charged with coming up with ideas for the city led by Jon Hanson, a real estate developer. Christie said he would give the Hanson commission another 30 days to gather information and that he expected the commission to generate recommendations in 45 days.
In 2010 Hanson oversaw the Governor's Commission on New Jersey Gaming, Sports and Entertainment. Among its recommendations was to give a substantial tax break to the developers of the Revel Casino to entice them to build Revel in Atlantic City.
On Sept. 2 Revel closed, two years and five months after it opened.
In other Atlantic City news Sept. 9, the parent company of the city's Trump Taj Mahal casino, Trump Entertainment Resorts, filed for bankruptcy saying that it intended to close the Taj Mahal unless it could reduce expenses by, among other things, gaining a new contract with its union.
In July Moody's Investors Service dropped Atlantic City to the speculative grade Ba1.