By Steve Norton
CEO, Norton Management

How Many Casinos are too Many?

My comment:

Ken Adams wrote a very compelling article in the CDC Gaming Report. I also responded to Mr. Fertitta's article, on Atlantic City offering too much gaming. This is not a new discovery.

All major gaming destinations in Nevada have had numerous failures, or unfinished projects, like the LV Fontainebleau. Mississippi saw its first 7 casinos in Tunica close due to the number of casinos competing for the Memphis market. Atlantic City saw 5 casinos close after Pennsylvania, approved slot machines and New York added slots at Aqueduct and Yonkers racetracks; with AC casino win dropping from $5.2 billion annually to a number less than half the 2006 win.

Some states protected casino developers by limiting communities to only one casino, like Illinois, a state that found another way to destroy their gaming industry, by adding 30,000 video gaming terminals to over 7,000 bars or other businesses with a liquor license. And Illinois is determined to further harm the 10 riverboat casinos, by adding 6 land based casinos, including a larger one in Chicago, slots at racetracks and an additional VGTs at the 7,000 licensed liquor establishments. Plus, the original riverboats can purchase 800 additional gaming positions.

But with the extraordinarily high fees on added gaming equipment, the state may not see 6 new casinos, or that many riverboats or bars, adding extra positions.

The 5 riverboat states, IA, IL, LA, MO and IN, that limited the number of casinos and their locations, have seen few failures, although many of the casinos have seen see their revenues drop dramatically because new states have added some form of gaming.

The incredibly successful riverboat in Lawrenceburg, IN has seen its win decrease from a high of $480 million, to less than $200 million, due to gaming – both casinos and racinos ¬– being added in Ohio. On top of new casino competition, many states are allowing online gaming and sports betting that will also compete with existing casinos and more so, with their own state lotteries.

Gaming industry, please wake-up!!