New York: Competition, Smoking Bans, and Internet Betting Worries Shake Up Gambling

During a significant casino conference in Atlantic City, challenges such as a possible smoking ban, the ongoing debate about the impact of internet gambling on physical casinos' profitability, and the business lost to illicit online operations were identified as key concerns.

Panelists at the East Coast Gaming Congress at the Hard Rock casino discussed turmoil in the industry, particularly as it prepares for the influx of three downstate New York casinos widely expected to redefine the regional gambling market.

New York is in the process of choosing casino sites and preparing to respond to hundreds of questions from potential casino operators before it moves closer to awarding licenses.

Mark Giannantonio, president of Atlantic City's Resorts casino and of the Casino Association of New Jersey, said his city has “a two-year window” to prepare itself for the new competition from its northern neighbor.

“We see New York gaming in general clearly as a threat,” he said, expecting stronger competition for customers from the region and from other countries who will choose to visit and gamble in New York.

He also said New York casinos will affect competitors in eastern Pennsylvania and Connecticut.

Giannantonio said Atlantic City needs to improve its cleanliness, infrastructure and public safety in order to meet the challenge of new competition.

“Casinos can only do so much,” he said. “We provide the jobs, the capital. Let's match the streets with the beautiful aspects of the ocean. Let's take care of our homeless population once and for all. There needs to be an investment and programs that will take a homeless person from the streets or under the Boardwalk and get them the help they need.”

Mayor Marty Small did not immediately respond to a request for comment Wednesday afternoon.

Stacey Rowland, chair of the New York Gaming Association, said the upcoming new casinos in her state are looking to capture gambling dollars currently going to other states.

“Competition is a good thing,” she said. “The competition from New York City will be a motivation (for rivals) to step up.”

Atlantic City also is facing a relentless push by casino workers who want to end smoking on the gambling floor. They have been urging lawmakers to pass a bill to ban smoking, and they recently filed a lawsuit to overturn a state law that exempts Atlantic City's casinos from the state's indoor clean air law.

Giannantonio called a smoking ban “one of the greatest threats to our business right now.” He predicted it would lead to the loss of as many as 2,500 casino jobs and millions in lost state tax revenue. He supports a compromise proposal to allow smoking to continue away from table games and in areas where no employee would be forced to work.

Casino workers reject those claims and say the gambling halls will do better financially by attracting non-smoking customers who now avoid them.

“Casino executives keep making the same discredited claims and are promoting a false compromise that will only continue to force us, their own employees, to breathe toxic air at our jobs every day," said Lamont White, a Borgata dealer and a leader of the employee non-smoking movement. “They don’t give a damn about the cancer and heart disease and stroke and COPD and countless other diseases that result from this unacceptable work environment that every other New Jersey worker doesn’t have to face.”

Some states are taking a renewed look at internet gambling as a way to raise new revenue. It currently is legal in New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut and Rhode Island.

Giannantonio said online gambling has helped Atlantic City's physical casinos. Resorts has a successful online arm, and it is affiliated with the DraftKings sportsbook.

But Rob Norton, president of Cordish Gaming Group and the Live! casinos, including properties in Maryland, Pennsylvania and Florida, said internet casino gambling has had a detrimental effect on brick-and-mortar casinos.“It is cannibalizing,” Norton said. Speaking for the industry in general, he said, “The approach we're taking right now is pitting ourselves against ourselves.”

His viewpoint is disputed by others in the industry, who say they have seen internet gambling complement their brick-and-mortar casino businesses.“For New Jersey, it has been additive,” Giannantonio said. Resorts, he said, has successfully integrated its customer loyalty program across its physical and online arms.

Online sports betting has been “a funnel for i-gaming” and in-person gamblers, he said.“We get a lot of people who bet sports online who come into our physical location to place a bet,” Giannantonio said.

The panelists all mentioned illegal offshore gambling sites and land-based unlicensed and unregulated slot machines as another threat to the casino industry.