Atlantic City Casinos in for a Rough Summer Leading economist are warning that the increasing cost of a gallon of gasoline could be another factor to drive gamblers away from the New Jersey resort and toward closer casinos in Pennsylvania and Delaware. Andrew Zarnett, managing director of Deutsche Bank Securities, said the Atlantic City casino industry could be in for a summer of sharply decreased profits if there is a repeat of a 2008-like run-up in gasoline prices, according to The Press of Atlantic City
. Repeat Performance of 2008 Back in 2008, slotoff.com
the price of a barrel of oil jumped to $140 and dragged the price of a gallon of gasoline up to nearly $4 a gallon in New Jersey. The price of a gallon of gasoline jumped to more than $4 a gallon in nearby Philadelphia. Currently, the price of a barrel of oil jumped to nearly $114 on Friday, April 8, according to CNBC.com . During its recent run-up from $84 a barrel, oil has dragged the cost of a gallon of gasoline in the South New Jersey area from $292.9 to nearly $3.55.9.
Skyrocketing Price of Gasoline According to numbers released by AAA Mid-Atlantic, the average price of regular gasoline on Friday, April 8 was $3.56, up 12 cents from the week before. It's also nearly $1 more than what motorists were paying at this time last year when the coast of a gallon of gasoline in New Jersey was $2.68. Meanwhile, the United States national average price for a gallon of gasoline rose by 11 cents to $3.74, according to AAA. That's also $1 more than it was last year.
Prices will continue to rise as long as the price of a barrel of oil continues to increase under pressure of world political tensions and a fast-approaching summer tourism season when demand usually peaks. This prediction for higher gasoline prices couldn't come at a worse time for the Atlantic City Casino industry, which has been in a downward spiral since 2005. In 2010 alone, Atlantic City Casino revenues dropped by 27 percent, according to the Press.
Atlantic Casino Revenues Dropped 27 Percent in 2010 Altogether, the 11 Atlantic City Casino hotels reported gross operating profits of $534.9 million in 2010, compared with $729.7 million in 2009, according to figures released recently by the New Jersey Division of Gaming Enforcement show. Operating profits fell 44 percent in the fourth quarter to $62.6 million, reflecting a dismal winter for the Atlantic City, the nation's second-largest casino market next to Las Vegas.
The five-year downward spiral has left Atlantic City Casinos with revenue figures that equal those posted by the resort back in the late 1990s.