The Mid-Atlantic's Casinos

The Gold Rush to Build New Casinos in the Region Continues to Gain Momentum 

Future MGM National Harbor
National Harbor, MD
Photo Credit: MGM

Until about 20 years ago, the only casino gambling options available to residents of the Mid-Atlantic were located in Atlantic City, New Jersey. Today, while other regions still only have legalized casino gambling concentrated in select few jurisdictions (particularly in the South and West), every state in the Mid-Atlantic region has legalized at least some form of (strictly) regulated commercial gambling and has at minimum solicited bids for the construction of multiple casinos.

Casinos in the Mid-Atlantic: The Numbers
Number of: Delaware Maryland New Jersey New York Pennsylvania West Virginia Casinos 3 6* 11 9 13* 5    - Commercial 0 3 0 0 4 0    - Racinos 3 1 0 9 6 4    - Resort 0 2 11 0 3 1 Slot Machines/VLTs 7,000 12,893 24,368 15,779 27,250 8,020 Table Games 172 402 1,540 0 785 228 Hotel Rooms 500 500 17,638 573 1,378 1,520

*Includes one casino to be constructed in the near future

Resorts International Atlantic City: the East Coast's first casino
Atlantic City, NJ

History of Mid-Atlantic Casinos
Casino gambling first arrived in the Mid-Atlantic in 1978 in Atlantic City. ("Gambling halls" with slot machines did exist previously however in Charles County, MD from 1949 until they were outlawed in 1968). Between the end of World War II and the 1970's, the previously well-regarded resort city had entered into a steep decline, becoming plagued crime, poverty, and corruption. In an effort to revitalize the city, in 1976 New Jersey voters approved casino gambling for Atlantic City. Immediately after the legislation passed, the owners of the Chalfonte-Haddon Hall Hotel began converting it into the Resorts International. It was the first legal casino in the eastern United States when it opened on May 26, 1978 and still exists among 10 other casinos currently operating in the city.

While Atlantic City never reached the success of Las Vegas--the so-called "Entertainment Capital of the World"-- the city's casinos helped the city regain its status as a desirable resort destination, one of the most popular in the nation by the end of the 1980's. 
The success didn't last long though. WIth the advent of two Native American casinos in Connecticut and the era of "mega resorts" in Las Vegas in the 1990's, tourism in Atlantic City began a period of decline that continues to this day. The arrival of casino gambling in neighboring states has significantly compounded the problem and will likely continue to do so into the future.

Aerial view of Hollywood Casino at Charles Town Races
Charles Town, WV

Casino Gambling Expands Beyond Atlantic City
Atlantic City's first wave of regional competition appeared in 1994 when both Delaware and West Virginia legalized gambling at "racinos"--combined horse (and dog) racetracks and casinos. Two years earlier, in New England, Rhode Island had also legalized racinos. Racinos proved to be very successful, particularly in West Virginia, and helped revitalize run-down racetracks as well as provide an overall boost to the horseracing industry. Legalization of racinos soon spread across the country, as far away as New Mexico, and are now legal in a total 12 states. New York, one of the most recent states to authorize racinos, legalized them in October 2001, and there are now 9 located throughout the state, including two located in or near New York City: Empire City Casino at Yonkers Raceway and Resorts World Casino New York at Aqueduct Racetrack. The opening of the New York  casinos further added to the misfortunes of the Atlantic City casinos.

SugarHouse Casino
Philadelphia, PA

Later in the decade, the legislatures of Maryland and Pennsylvania (the last two commercial gambling holdouts in the Mid-Atlantic) both passed measures to legalize casino gambling in 2008 and 2004 respectively. Unlike the other states of the region (except New Jersey), both states went a step further than racinos by legalizing a limited number of stand-alone casinos with strict restrictions attached. In addition to seven racino licenses, Pennsylvania made five licenses available stand-alone casinos (two in Philadelphia, one in Pittsburgh, and two at-large), and additional two to existing hotel resorts. Maryland passed similar legislation (ratified by voters in a 2008 referendum) which allowed the construction of five casinos in four counties and Baltimore city geographically dispersed throughout the state. Two of these casinos were built as racinos at existing horse tracks.

Horseshoe Casino Baltimore (opening fall 2014)
Baltimore, MD

Custom Google Map with location, pictures, and critical info of every casino in the Mid-Atlantic:

(Tip: Press the box above the map in the top right corner for a better view)

The Emergence of Table Games
Despite the rapid erosion of Atlantic City's monopoly on casinos in the Mid-Atlantic, the city still had one decisive competitive advantage in the mid-2000's: the presence of table games. Up until this point, all of the racinos in the Mid-Atlantic, as well as the stand-alone casinos in MD and PA, were restricted to slot machines and "VLT's" (Video Lottery Terminals). Not surprisingly, this advantage soon disappeared as well. 

Table games at Sands Casino Resort
Bethlehem, PA

The intense competition created by the legalization of some form of casino gambling in every Mid-Atlantic state spurred sparsely-populated (and therefore heavily dependent on tourists from other states) West Virginia to legalize table games at its racinos in 2007 (subject to local county approval). Delaware (another tourist-dependent state) and Pennsylvania quickly followed, both legalizing table games in 2010. Maryland, just four years after approving commercial casinos, approved table games via legislation and voter referendum in 2012. Both Maryland and Pennsylvania's table game legislation allowed for an additional stand-alone casino/resort in their respective states. 

Feeling the pressure from the new stand-alone casinos Pennsylvania and being the only state in the region without table games, New York legalized table games as well as stand-alone commercial casinos via statewide voter referendum in November of last year. The legislation provides for the construction of seven new casinos throughout the state. However, it includes a 7-year ban on casinos in New York City and its suburbs and none of the new casinos would be located near the five gaming palaces operated by Indian tribes. The four initial casinos would be located in three different upstate regions.

Maryland Live! Casino: the highest earning casino in the Mid-Atlantic
Hanover, MD

Stiff Regional Competition Erodes Casino Revenue at Outlying Sites
While Atlantic City has seriously struggled to deal with its new Mid-Atlantic competition, it's certainly not alone in this regard. While the first wave of casino/racino legislation in the 1990's/early 2000's helped revive racetracks in West Virginia, Delaware, and New York, as well as provide boosts to local economies, the revenue stream has started to dwindle thanks to the second wave of casino legalization in the Mid-Atlantic. In addition to the casinos in Atlantic City, West Virginia and Delaware casinos thrived because they brought residents from densely populated metropolitan areas where casino gambling was illegal or restricted. Now that the state's surrounding the Baltimore, Washington D.C., Philadelphia, and New York metropolitan areas (MD, PA, and NY respectively) have all legalized stand-alone casinos and table games, residents have no need to travel 45 min-2 hours to the metropolitan periphery to gamble. This, of course, has resulted in sharp reductions in revenue for exurban casinos and truckloads of revenue for suburban/urban casinos. 

To put this into perspective, in March 2013 Maryland Live! casino in Anne Arundel County, MD reported $44,613,545 in revenue, outperforming every other casino in the Mid-Atlantic. This was a month before the casino added table games. (Of course the casino had enjoyed a virtual monopoly on casino gambling in the Baltimore-Washington area since Maryland's other three casinos were located at the western, northeastern, and southeastern extremities of the state.) 

The financially struggling and relatively empty Revel Casino
Atlantic City, NJ

At the same time casinos in West Virginia and Delaware were struggling just to break even.  Table-game revenue at Hollywood Casino at Charles Town Races, about 75 minutes from Washington D.C., was down 34 percent for the last six months of 2013, resulting in a loss of nearly $10 million in tax revenue for West Virginia. In Delaware, revenue fell by about 12 percent at Dover Downs and by 17 percent at Delaware Park Racetrack & Slots. Total gambling revenue at Atlantic City's casinos has fallen 42 percent, from a peak of $5.22 billion in 2006 to $3.05 billion in 2012. Total revenue for all 12 Atlantic City casinos was down 6 percent in 2013, and two weeks into 2014 the Atlantic Club closed permanently. Caesar's Entertainment also recently announced that they would be closing their Showboat casino at the end of August. Perhaps even more shocking is the news that the $2.4 billion Revel Casino, which is barely two years old (and now in its second bankruptcy), might also close by the end of the year.

Live! Philadelphia: one of six competing proposals to build a casino in Philadelphia with the state's 14th (and final) casino license
Philadelphia, PA

The Future of Commercial Casinos in the Region
Things will undoubtedly only get worse for existing properties in DE, NJ, and WV as new casinos open in Baltimore, the Washington D.C. suburbs, Philadelphia, and upstate New York. Casino gambling in the region is clearly here to stay though. As states seek to infuse their budgets with additional revenue and prop up declining horse-racing industries (which get a sizable cut of casino revenues in most Mid-Atlantic states), commercial casinos (which have extremely high revenue tax rates compared to other commercial sectors) have proven to be very lucrative. The steady expansion of casino gaming to additional properties and the legalization of table games are signs of their (near-term) success. 

Future Foxwood Catskills Resort Casino
Liberty, NY

The major difference now, compared to the heyday of Atlantic City in the 1970's/80's and Delaware/West Virginia in the 1990's, is that casinos are being built in metropolitan areas to capture the gambling spending that had been flowing across state borders.  Now that every state in the Mid-Atlantic has legalized commercial casinos and table games (in some form), the real long-term value of these new ventures can be assessed. In a couple of years casinos in Atlantic City, Delaware, and West Virginia should see their declining revenues leveling out when the current casino build-out winds down. It remains to be seen though if the limits on the total number of allowed casinos in Maryland (6), New York (7), and Pennsylvania (15) (which allegedly match the number of casinos to actual regional market demand) remain fixed over the long-term.