On May 14th, the Supreme Court struck down the Professional and Amateur Sports Protection Act, a law passed in 1992 which banned gambling and wagering on the results of a single sports game in all U.S. states except Nevada, Montana, Oregon, and Delaware. As recently as 2016, sports betting in Nevada, the gambling capital of the world, generated over $5 billion. With this historical decision, individual states are now able to enable sports gambling either in-person or online. It is reported that U.S. citizens spend over $150 billion each year in illegal sports betting, so there is a large pie of opportunity for states to take advantage of.
The state that led the rallying cry to legalize sports gambling was New Jersey. It currently has the best infrastructure in place to lead the new frontier of legalized sports betting, already offering the largest casino, online gambling, and horse racing industry on the East Coast. Atlantic City, the gambling mecca of the state, produced $3.7 billion (about 67% of total) in revenue in 2015 from gambling alone. Now the city is poised to receive an influx of new revenue from gambling, hospitality, and new businesses that will inevitably form as a result of the Supreme Court’s monumental decision.
This new revenue will create more jobs, thus spurring the demand for more housing in the area. This is great news for a city that was on the verge of bankruptcy as recently as two years ago. The major profit centers of the city – the casinos – had been in extreme turmoil since the 2008 recession, with five of the city’s 12 casinos closing between 2014 and 2016. Recently, however, there had been some hope of the city turning its financial woes around with the announcement that Hard Rock International would be opening a new casino on the site of the old Trump Taj Mahal this summer, and Revel, a casino which had a short lifespan from 2012-2014 would be reopening next year.
Many analysts are predicting that the sports gambling decision will be a game changer for Atlantic City, at least in the short term. Since New Jersey is the state most poised to begin legal sports betting right away, its casinos can take advantage of the new influx of gambling revenue immediately. However, its neighbor, Pennsylvania is also ready to take advantage of the new law, but many believe the demand is great enough that Pennsylvania would not cannibalize New Jersey gambling enough to be significant. However, once more states, especially on the East Coast are able to effectively pass their gambling laws and put the right infrastructure in place, this may spell trouble for the city again. Also, the boon in online gambling may take away significant revenue from the brick-and-mortar casinos and race tracks. With that being said, Atlantic City will be a haven for sports bettors that want to have more of experience – dining, seeing shows, visiting museums, etc., than just simply going to the casino to place a bet.
The local housing market in Atlantic City has been indicative of the gradual decline of the casino industry in the city. As recently as 2016, Atlantic City ranked #1 in the nation for foreclosures. According to Realtor.com, the median listing price for homes in the city is currently $109,000, down from $114,900 (approximately 6%) from 12 months ago. The median price per square foot is down approximately 22% to $87 from $106 over the last 12 months. Overall, average property values declined 3% over the last 12 months. The absorption rate of the market does signal some signs of progress, with the median days on the market decreasing from 247 days to 92 days from June 2016 – June 2017.
Only time will tell what advantages the new sports gambling legislation will bring to Atlantic City. There will undoubtedly be an increase in jobs and a greater demand for Atlantic City as a destination for longer-term stays featuring a myriad of activities as opposed to just day trips to the casinos. The increase in hospitality and sales tax should also be beneficial to Atlantic County as a whole. A 2015 study from the University of Nevada, Reno indicated that when a new commercial casino was opened in any U.S. county, the per-capita revenues increased by 7.8%. With the opening of the new Hard Rock Casino, possible reopening of Revel, and the boon of visitors that sports gambling will attract, the city is poised for economic growth, at least in the short term. As the national landscape adapts to this new sports gambling law, it will be interesting to see if the economic boom is sustainable as other surrounding states enable sports betting both locally and online.