Chen Zhang, W. Irving, M. Lahr
Journal name not available for this finding
Competing casinos in Delaware, Pennsylvania, and New York State continue to erode revenues at Atlantic City’s casinos. Yet, recent evidence from nascent aspects of New Jersey gaming industry (sports betting and Internet gaming) suggest that the Atlantic City market might not be saturated. To assess whether the market is saturated or not, we first draw on the greater region’s casino gaming revenue history as well as county aggregate personal income and empirically derive the spatial extent of Atlantic City’s market. We then find a measure—regional gross gaming revenues (GGR) as a share of regional aggregate personal income—that suggests the market has been fairly saturated since at least 1990. We then apply two models—Huff’s and a time-series regression—to estimate impact of the addition of new casinos upon those in Atlantic City. Both suggest diminishing returns to scale of additional city slot machines upon the GGR within New Jersey. They also both show that new casinos in competing states would further erode Atlantic City’s share of regional GGR. This, of course, assumes that the greater economy continues apace.