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Beating the Odds:The Transformation of

Atlantic County

Robert Checchio

Dyana Tanasy

January 31, 2006

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Objectives

Examine Atlantic City’s economic growth

Compare Atlantic City to a successful Model

Consider future obstacles to growth Present a strategy for growth and success

for Atlantic County

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Outline

Atlantic City Las Vegas Key Differences Proposed Solution Transportation Issues Issues to Resolve

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Atlantic City

Historic tourist location Famous boardwalk Home to Miss America, the Steel Pier,

Lucy, and salt water taffy Tourism declined after WW II

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Atlantic City – Gaming Comes In

Legislation introduced in 1976 Economic Impact

– Gaming Revenue– Non-gaming Revenue

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Atlantic City – Why not more?

Questions to be answered:– Why is Atlantic City not experiencing more

robust economic growth?– Are there demographic factors?– Are there geographic factors?– Are there political/policy factors?

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Las Vegas, Nevada

City developed first as a rail stop in 1980 – first rails completed 1904

Gambling was banned October 1, 1910 Legalized gambling returned to Nevada

during the Great Depression (1931) Casino boom started in the 1940s, and

surged during the 1950s

Source: http://www.lvol.com/lvoleg/hist/lvhist.html

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Las Vegas – The Second Boom

The introduction of gaming in Atlantic City led to a second boom – the creation of the “mega-resort”

Hotel-casinos began the race to become full-blown destination resorts for travelers, vacationers, gamblers, conventioneers and all members of the family.

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Economic Impact - Gaming Revenue

Gaming Revenue (1990-2005)

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

1990 1992 1994 1996 1998 2000 2002 2004

$ Billion

Atlantic City

Las Vegas Strip

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Gaming vs. Non-Gaming Revenue

2005 Revenue (billions)

0

2

4

6

8

10

12

14

16

18

20

Atlantic City Las Vegas

Gaming Non-Gaming

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Visitors by Type

Annual Visitors

0

10

20

30

40

Atlantic City Las Vegas

Millions

Day Trippers Overnighters

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Atlantic City – An Auto Destination

Atlantic City Trips by Type (2003)

76.2%

22.6%

0.8%

0.4%Auto

Bus

Air

Rail

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Rooms AvailableCasino Hotel Rooms

0

20

40

60

80

100

120

140

Atlantic City Las Vegas

Thousands

1970 1980 1990 2000

2004 Room Occupancy

89%

94%0

20

40

60

80

100

120

140

Atlantic City Las Vegas

Thousands

Occupied Vacant

Source: Las Vegas Convention and Visitors Authority, Atlantic City Convention Center Authority

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Past and Planned Developments

The Borgata The Walk Showboat’s House of Blues Tropicana’s “The Quarter” Pier at Caesars

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Employment Levels – Last 14 Years

EMPLOYMENT LEVELS

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Las Vegas MSA

Atlantic City MSA

Source: http://www.economagic.com/blsmsa.htm

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Gaming Revenue Breakdown

Gaming Revenue Breakdown (2005)

73%

27%

Table

Slot

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Competition Ahead

New York Racetrack Slot Machines New York Indian Resort Casinos Connecticut Indian Casinos Delaware West Virginia Maryland (planned) Pennsylvania (planned) The Internet…

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Online Competition

Estimated Internet Gambling Revenue (Billions)

$0

$2

$4

$6

$8

1999 2000 2001 2002 2003

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Key Differences

Fewer restrictions on gaming areas Availability of land for expansion Emphasis on (and growth of) non-gaming vs.

gaming revenues Flip-side: Nothing in Atlantic City except

gaming Atlantic City as a “daytime destination”, vs.

Vegas as an “overnight destination” Atlantic City more vulnerable to competition

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Our Proposal:

XANADU SOUTH

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Xanadu as a Model

Model after Xanadu Meadowlands Location: eastern Hamilton Township Focus on growth of non-gaming revenue

– Restaurant and Retail– Entertainment– Hotels

Goal: the “new” Atlantic County– Create a new overnight destination: a family-

oriented entertainment center as an adjunct to the gaming district

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Xanadu South Key Components

Lodging Conference Centers Restaurants Family-focused Entertainment Sports and Amusements

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Xanadu South Benefits

Jobs Economic Development Tax Revenue Infrastructure Development

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Xanadu South - Transportation

Eliminate the need for personal automobiles Personal Rapid Transit connecting Xanadu-

South to:– Atlantic City International Airport (ACY)

– Atlantic City – “The Boardwalk”

– Park-and-Ride Centers at appropriate locations at AC Airport and near the Garden State Parkway Atlantic City Expressway

Extend PATCO to Xanadu-South

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Xanadu South – Personal Travel

Based on the successful system in service since the 1970s in Morgantown, WV

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Xanadu South - PATCO Extension

Draw visitors from Philadelphia

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Xanadu South – Patco Extension

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Xanadu South – Issues

Legislative– Gaming currently restricted to Atlantic City

(limits growth potential)

Environmental Concerns– Use Xanadu Meadowlands as the model

Financing– Casino revenues– Private developers