Credit debt watchers express concern about Atlantic City casino industry

In a report by The Press of Atlantic City, Fitch Ratings and Standard & Poor’s (S&P) Global Ratings said a gaming market turnaround could hurt the Atlantic City's existing properties.

“There is a concern with the increased supply that will be created by the opening of the Hard Rock,” said Colin Mansfield, a director at Fitch Ratings and a lead analyst in the gaming, lodging and leisure sector.

“The market has shown signs of stabilization after the closures, the remaining operators are seeing increased profits and more supply will take away from the existing properties”

Meanwhile, Standard & Poor’s said state credit quality is unlikely to improve.

“While there could be short-term economic and budgetary gains, they are unlikely to improve state credit quality. With declining tribal gaming revenues in Connecticut and the erosion of the Atlantic City gaming monopoly in New Jersey, long-term risks from commercial casino gaming are an ongoing credit risk,” a Standard & Poor’s report said.

“As states in the region continue their gambling expansion, coupled with the region’s weak demographic trends, the likelihood that these revenues will meaningfully supplement state revenues over the long term diminishes and will have long-term credit implications.”