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Atlantic City, NJ casino revenues were down 2 percent in July widening a broader trend this year towards an overall down year. AC gaming profits are down for six out of the seven months so far this year.
If the trend in off-profits continues, it will mark the first year of decline in Atlantic City's lucrative gambling business since legalization in 1978.
Most analysts have contextualized the downbeat trend in terms of regional issues: the new statewide smoking ban or local competition from neighboring states like Connecticut, Delaware, New York, and Pennsylvania.
A more comprehensive analysis may be needed: the international credit crisis stoked by the US mortgage market, coupled with US unemployment and falling incomes, plus lack of personal savings, may signal national problems.
AC has invested heavily in high-end retail to attract more destination-oriented consumers with attractions and amenities outside of the casinos.
However, it is also worth noting that the Atlantic City regional real estate market is estimated to be overvalued by at least 50 percent paralleling concerns in the mortgage sector.
One of the first expenses consumers having trouble paying their mortgages are likely to target for cutting is leisure and discretionary spending, like gaming.
The question of buying a Gucci bag or a Tiffany bracelet just seems illogical if you can't pay your mortgage.
