Casino gambling revenue may be down by more than 27 percent in Atlantic City, but third-party businesses located within the casinos are thriving.
Restaurants and retail shops that lease space in the casinos reported sales of $246 million in 2012, an increase of 39 percent over the previous year. The number of third-party businesses rose from 115 in 2011 to 162 in 2012, according to a report released Wednesday afternoon by the Division of Gaming Enforcement.
Many of these businesses are helping draw tourists to Atlantic City for reasons other than gambling, said Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at Stockton College.
“As of September 2012, 44 percent of the food and retail outlets citywide were owned or operated by outside vendors,” Posner said. “There is no question the city is attracting people interested in a getaway or vacation rather than just gambling. These properties offer more than a casino flavor. Some of them are first-class restaurants.”
The number of leasing tenants varies from casino to casino, Posner said. The Atlantic Club owns virtually all of its shops and restaurants, while a good portion of those at Tropicana are leased by third parties. Nearly 100 percent of Revel’s shops and 14 restaurants are third-party businesses.
“Revel has added a lot of top-shelf third-party amenities to the city,” Posner said.
A case in point for third-party leases is sure to be Jimmy Buffett’s Margaritaville complex. When that opens its restaurants, bars and retail shops at Resorts Casino Hotel on Memorial Day weekend, it’s “going to be huge,” Posner said. “That is a well-known brand that has a following around the world. The Parrotheads will certainly be a big draw. It’s evidence that Atlantic City is becoming something different.”