Moody’s Investors Service called New Jersey’s decline in gambling revenues is a credit negative for Atlantic City.
The American Gaming Association recently released its annual report, in which it stated that although gross U.S. gambling revenues rose 3% from 2010 to 2011, New Jersey recorded a 7% drop and was the nation’s worst-performing state.
New Jersey’s casinos are solely located in Atlantic City, which Moody’s rates at Baa1 with a negative outlook.
“The report’s findings are credit negative for Atlantic City, whose tax base depends heavily on gaming revenues,” Moody’s analysts said in a report last week.
The reasons for the decline in revenues include continued softness in the economy and increased competition for gambling throughout the mid-Atlantic region, including new casinos in neighboring states, analysts said.
According to the American Gaming Association’s report, New Jersey had a 7% drop in consumer spending on casino gambling, while neighboring New York had a 15.6% increase and Pennsylvania saw a 21.3% rise.