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Atlantic City

How Has NJ Online Gambling Benefited Atlantic City And Its Casinos?

January 9, 2018
atlantic city online gambling nj revenue

Since launching in November 2013, online gambling has been a true success in New Jersey. There are others making hay, but the state itself is clearly one of NJ online gambling’s biggest beneficiaries.

In fact, in May 2017, the state pushed past the $100 million mark in terms of tax revenue received from New Jersey online gambling websites since NJ online gambling first launched. Plus, the next $100 million in tax revenue for the state should come in even quicker.

Collectively, New Jersey online gambling websites are now averaging a record $20 million a month in revenues. Of course, that means the burgeoning industry is generating tax revenue for the state at a faster rate than ever before.

New Jersey’s tax rate for online gambling providers is set at 15 percent. That’s almost double the 8 percent the state charges legal land-based casinos in Atlantic City. It means that online casinos are expected to generate an estimated $36 million in tax revenue for the state this year alone.

The next $100 million in tax revenue from NJ online gambling

It took approximately 42 months, from November 2013 to May 2017, for the state to earn its first $101.3 million in tax revenue from NJ online gambling sites. That’s an average of just over $2.4 million a month. With online gambling site revenues on the rise, the state is now pulling in an average of $3 million a month in tax revenues from online gambling.

At that rate, it should take just 34 months to get from $100 million to $200 million in total tax revenue paid since online gambling launched. That’s eight months faster than it took to get to the first $100 million.

Plus, seven of those months are already in the books as 2017 came to a close. If things keep going at this rate, the state should push past the $200 million mark in terms of tax revenue received from New Jersey online gambling websites by the first quarter of 2020.

Atlantic City casino industry reaping big benefits

Of course, the once-struggling Atlantic City casino industry is reaping big benefits from NJ online gambling as well.

State law dictates Atlantic City casinos are the only entities that can be licensed to run online gambling sites. According to the New Jersey Division of Gaming Enforcement, five Atlantic City casinos, or the online gambling companies affiliated with these casinos, hold New Jersey internet gambling licenses.

This includes:

There are currently 23 different online gambling sites operating under these five licenses. Of course, a number of the sites are owned and operated by the licensees under their own brands. However, the licensees have also partnered with online gambling operators from out of state to operate alternatively-branded NJ online gambling sites.

Either way, the revenues the sites generate is added to the Atlantic City casino internet gambling licensees totals.

Atlantic City land-based casino revenues reached $2.406 billion in 2016. This was down slightly from the $2.414 billion Atlantic City casinos posted in 2015. However, internet gambling revenues rose 32 percent to $196.7 million in 2016. As a result, total gambling revenues actually reached $2.603 billion. This represented a year-over-year increase of 1.5 percent over 2015.

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Turning around a decade of declines

The Atlantic City casino industry had not posted a year-over-year revenue increase since 2006. That means NJ internet gambling revenue directly helped turn around a decade of declines for Atlantic City casinos. Plus, things just keep getting better.

New Jersey online gambling websites surpassed $200 million in revenue generated in October of this year. That broke revenue records set in 2016 with two months still to come before the end of the year. With NJ online gambling sites set to post an estimated $240 million in revenues in 2017, the Atlantic City casino industry is poised to set revenue gains for the second year in a row.

After a decade in the tank, the Atlantic City casino industry is growing again, and online gambling is more than just partly responsible for the turnaround.

PokerStars NJ’s Live Event In Atlantic City Turns Into Second Bad Beat

October 28, 2017
New Jersey PokerStars live events

For as popular as PokerStars’ online tournaments and sit-and-go games are in New Jersey, its two live events in Atlantic City have been busts by most accounts.

Low turnout plagued PokerStars’ live MEGASTACK poker series Oct. 6-8 at Resorts Casino Hotel, marking the second consecutive live tourney disappointment. This most recent weekend event was divided into the Sunday Special Live main event and the no-limit deep-stack “Cheap and Deep.”

Overlays on both PokerStars NJ tournaments

PokerStars’ main event tourney on Oct. 7 boasted $100,000 in guaranteed prize money, and four different starting flights competed.

Sunday Special Live drew 409 entrants and, when multiplied by the $220 buy-in, the total prize pool generated by entrants was $89,980, resulting in an overlay of $10,020. The picture was pretty bleak on the deep-stack side. The event brought in less than half of the guaranteed $25,000 purse.

PokerStars’ own Chris Moneymaker won the deep-stack tourney while Egg Harbor Township’s John Monahan won the Sunday Special Live.

Why is PokerStars struggling with live events in NJ?

It’s up for debate why PokerStars is having a hard time filling seats at live tournaments.

Maybe players aren’t going simply out of inconvenience and cost. Atlantic City is the only location in the state with casinos — a November 2016 referendum kept it that way.

Players in northern New Jersey may find the drive south too far, particularly considering the amount of money they’d spend on gas, a hotel stay, and food for the weekend, not to mention buy-ins. Why drive two hours to a tourney when they can play from the comfort of home?

In that sense, PokerStars’ online popularity in the state may very well be working against its live tournaments.

Another factor could be the amount of money that can be won online versus in person. PokerStars’ September/October tournament series featured 46 online events with more than $1 million in prize money. The biggest event on that schedule, purse-wise, was the Oct. 15 NL Hold ’em Main Event, which had a $200,000 prize pool.

Multiple factors hampered first tournament

While there haven’t been any theories as to why the most recent PokerStars event didn’t perform as expected, experts in the industry say the company’s first event in Atlantic City in October 2016 was the victim of several converging factors.

These included the lack of a guaranteed prize pool, another poker event happening at Borgata Hotel Casino & Spa, and having only two months to market the event.

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Image credit: James Kirkikis / Shutterstock.com 

Cleanup Needed On Pacific Avenue: Atlantic Club Ceiling Collapses

October 3, 2017
Atlantic Club casino NJ ceiling

Not everything in Atlantic City is getting revitalized or rebuilt. Some parts are literally falling apart.

The ceiling at the entrance of the shuttered Atlantic Club collapsed last week. The former resort casino has been the subject of acquisitions that have fallen through in recent years.

The AC is one of several closed casinos in NJ that have not reopened, and with no imminent plans to do so.

Someone’s going to have to clean that up…

Luckily, the Atlantic Club is not currently active or hosting any guests. It’s been closed since 2014.

Here’s a look at the damage:

The Press of Atlantic City was on the scene to detail what happened, quoting Atlantic City’s director of licensing and inspection Dale Finch as saying:

“The drywall and Styrofoam ceiling of the porte cochere collapse created a large pile of debris, exposing insulation early Wednesday morning. By Wednesday afternoon, the pile of debris was removed. We talked to the owners, and they said they are going to be here either tomorrow or Friday to make the needed repairs.”

In good news for the resort’s resale value, it appears there’s no actual structural damage.

Purchases for shuttered NJ casino have fallen through

On at least two different occasions, investment groups have tried to purchase the Atlantic Club to reopen it as a water park.

The most recent attempt came this spring, when it appeared that an effort to buy the resort and turn it into “Dolphin Village” — sans casino gambling — was all but a done deal.

But the financing for the acquisition fell through, and the Atlantic Club continues to sit vacant as a result.

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No new chatter on Revel/TEN casino reopening

The biggest shuttered resort in AC — Revel (or TEN AC) is still closed. A bidder has emerged for the property that has sat closed for years, shortly after it was built for a price tag in excess of $2 billion.

But since a report that the potential buyer upped its bid, things have been silent.

For now, the only plans to open a closed casino will come next year, when Hard Rock relaunches Trump Taj Mahal.

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Image credit: Creative Family / Shutterstock.com

Atlantic City Reaches $80 Million Tax Settlement, Thanks To The State Of New Jersey

August 7, 2017
New Jersey casinos AC settlement

Atlantic City has 80 million reasons to be thankful for state takeovers.

While Atlantic City leaders and residents recoiled at the prospect of that takeover back in November, it looks like a saving grace now.

Last week, Gov. Chris Christie announced the state had reached an $80 million settlement regarding the city’s property tax debts to seven casinos, effectively ending the money drain that helped cripple its finances.

Christie says state rescued Atlantic City from ‘vexing’ circumstances

According to multiple reports, Christie’s financial team put together a series of bond ordinances to pay the tax debt. We don’t know exactly how much each casino will receive or how much was owed. We do know this is a huge step forward for Atlantic City’s finances.

Christie, never one to shy away from promoting his successes in AC, was quoted on NJ.com as saying the settlement was “the culmination of my administration’s successful efforts to address one of the most significant and vexing challenges that had been facing the city.”

“Because of the agreements announced today, casino property tax appeals no longer threaten the city’s financial future,” Christie added.

Sen. Jeffrey Chiesa, who helped lead the takeover, was quoted as saying his team has neutralized the threat of casino property taxes. Chiesa remarked that “residents can breathe easier” because the city is now in a much better financial position.

The state’s victories are impressive

While we don’t know the amounts that the state will pay to each casino, we do know there’s a good chance it will be less than what was owed.

Chiesa spearheaded the state’s $72 million tax settlement with Borgata Hotel Casino & Spa this past February. The deal was a bargain relative to the $165 million for which the casino was asking.

It’s tough to say exactly why Borgata’s owner, MGM Resorts International, agreed to the deal. But its official statement on the matter may reveal a deeper motivation to settling.

MGM International Executive Vice President John McManus said the company accepted the “reduced payment” because it is “committed to being a catalyst of Atlantic City’s strong and vibrant future.”

MGM may also have been hoping to get as much guaranteed money as possible from the settlement. McManus said as much in other parts of his statement.

However, it’s not hard to imagine NJ casino owners are well aware of the Atlantic City’s noticeable growth during the last eight months and are willing to forgive some debt to keep the momentum going.

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Our NJ online casino forum helps Garden State players keep up with NJ online gambling news, NJ online casino bonus codes, and more.

Image credit: Felix Mizioznikov / Shutterstock.com

With Casino Revenue On The Rise, Caesars Ups Its Game In Atlantic City

July 31, 2017
Caesars Atlantic City NJ casino upgrades

After crashing to an all-time low, Atlantic City’s gaming industry is once again on the ascent. And the remaining casinos along The Boardwalk and in the Marina District want to keep the momentum going.

Casino reinvestment has kicked into high gear, with the city’s operational casinos reinvesting in their properties to the tune of more than $1 billion since 2008, according to the Press of AC.

Caesars focusing capital reinvestment on Harrah’s

Despite dealing with bankruptcy restructuring, Caesars has spent some $200 million in renovations and upgrades to its three Atlantic City properties during the past three years. But the bankruptcy restructuring has taken its toll, forcing Caesars to play favorites among those sites.

Most of the recent updates and upgrades have been to Harrah’s, one of the largest and best-performing New Jersey casinos. According to the Press of AC, since 2008, Caesars has spent more money on capital improvements to Harrah’s ($215 million) than to its eponymous casino and Bally’s combined ($176 million).

With Caesars’ bankruptcy reorganization now approved by the Casino Control Commission, the state is hoping the Harrah’s upgrade spirit will spread to the company’s other two properties.

The Press of AC reports that an attorney general’s filing on the bankruptcy reorganization states:

“The relatively low level of capital expenditures is, in the division’s view, one reason that the net revenues from Caesars AC and Bally’s remain well below historical levels. In the Division opinion, the projected capital expenditures for 2017 and 2018 would not be sufficient to address past deficiencies and provide a much-needed boost to their competitive positions.”

For an idea of what the parent company might have planned for Caesars and Bally’s, one simply needs to look at what Caesars has been doing across town at Harrah’s.

What’s new at Harrah’s Casino NJ?

In its latest round of enhancements, Caesars spent $30 million on the following:

  • Several new restaurants;
  • An overhaul its pool and nightclub, which has been rebranded as The Pool After Dark;
  • Renovations and upgrades to 450 hotel rooms.

The $30 million of improvements are in addition to the $125 million Caesars spent on updating and increasing the size of the Harrah’s Waterfront Conference Center. The company completed the conference center project in late 2015. It doubled the property’s meeting space, giving Harrah’s the city’s largest conference space (in a casino).

Explained Bally’s and Caesars President Kevin Ortzman and Harrah’s Regional President Rick Mazer in a joint statement:

“Building on the highly-successful openings of the Wild Wild West at Bally’s and our $125 million Waterfront Conference Center at Harrah’s Resort, we are excited to complete our master-plan enhancement project just in time for summer, and debut our finely-appointed Bayview rooms and suites, three world-class dining experiences and an upgraded nightlife experience at Harrah’s Resort. 

“Atlantic City, with its iconic beach and world-famous Boardwalk, has been a mainstay summer destination for decades, and our resorts – Bally’s, Caesars and Harrah’s – are committed to offering guests first-class, Vegas-style experiences – without the flight.”

New eateries

The latest updates included adding several new dining options.

  • C. Burger Co., which offers a modern take on classic and signature burgers and also features an extensive craft beer menu and creative, one-of-a-kind “adult” milkshakes;
  • Coastal Craft Kitchen + Bar, designed to encourage the ultimate social experience with shared plates and a lively, weekend boozy-brunch scene;
  • Veracruz, a restaurant inspired by Mexican and Spanish street fare. It includes classic Spanish paellas, tuna tartare nachos, and a wide variety of margaritas, sangrias, and Spanish and Latin American wines; and
  • Guy’s Sammich Joint, a first-of-its-kind, quick-service concept created by Food Network personality, restaurateur, and author Guy Fieri.

New pool area

Another integral part of the project was an overhaul of the Harrah’s pool-by-day and club-by-night.

According to a press release from Caesars, the pool area now features:

“… a glass-enclosed heated dome, upgraded cabanas and bungalows, a new elevated stage and DJ area, dance floor, and massive LED walls for celebrity performances.

The venue’s second floor balcony offers first-class cocktail service and gaming paired with energetic cage dancers, all with 180-degree aerial views of electric scene below. Recent A-list celebrity appearances include Paris Hilton, DJ Pauly D, Nick Cannon, Amber Rose, and countless others.” 

The Pool After Dark is the fourth bar/lounge/club at Harrah’s and joins the existing:

  • #BarWithNoName at Harrah’s Resort, a new lobby bar. It offers a relaxed, casual environment for hotel guests to grab a specialty drink or classic cocktail;
  • Eden Lounge at Harrah’s Resort, revealing a laid-back side of Atlantic City nightlife. It features daily live entertainment with no cover charge; and
  • X Bar at Harrah’s Resort, located in the middle of all the action on the casino floor.

Renovated rooms

Caesars also renovated and updated 450 rooms in the Bayview Tower.

Caesars hired the Las Vegas-based design firm Marnell Companies to re-design the 600-square-foot rooms.

According to the press release, “Bayview rooms… now feature rich hues of lavender and blue accent colors, contrasting white and gray tones, and contemporary furniture — including a vanity dressing area.”

“Freshly-appointed, modern bathrooms offer oversized showers, while select rooms also include luxurious baths and signature amenities,” the release noted.

Author’s note: I attended a conference at Harrah’s, stayed in one of the renovated Bayview rooms, attended a function at the pool, and ate several of the restaurants in May. I was impressed all around, specifically with the room and the meeting facility.

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Image by Richard Feliciano / CC BY-NC-ND 2.0

GameCo Launches Two New VGMs At The Tropicana Casino In New Jersey

May 14, 2017
GameCo NJ casino games

GameCo is at it again.

Recently the game developer announced it had launched a pair of new video game gambling machines (VGMs) in Atlantic City: two at Tropicana Casino & Resort and one at Harrah’s Resort.

The new releases are additions to two other GameCo VGMs at Tropicana, Atlantic City Weekly said.

Basketball and roulette at Tropicana NJ casino

Gamblers at the Trop now have the option of playing GameCo’s Nothin’ But Net and Spread-Bet Roulette.

Nothin’ but Net

Details on Nothin’ but Net are sparse. But what we gathered from the GameCo website indicates that each round of betting involves 16 shots and can take wagers between $2 and $20.

Gamblers can choose between a male or female shooter, and all shots take place on an urban basketball court. These shots are a combination of lay-ups and jump shots from various places on the court and, like the NBA’s three-point contest, include a money ball that’s worth more points.

“Your skills will be challenged as you test your range from down-low to downtown,” GameCo’s description of the game reads. “Just don’t miss the money ball!​”

Spread-Bet Roulette

A press release from Tropicana provided further details about Spread-Bet Roulette, a game that has yet to have its own page on the GameCo site.

The roulette game is basically a spread bet with payouts as big as 400-to-1. Balls are dropped on an inner and outer wheel which spin simultaneously. Before they’re dropped, though, a spread number is displayed and bet on.

When the balls stop, their corresponding numbers are added up and bettors win or lose based on their original spread bet.

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Two newbies add to pair of VGMs at Trop

As we mentioned earlier, Nothin’ but Net and Spread-Bet Roulette will be added to the Trop’s pair of GameCo VGMs: Danger Arena and Pharaoh’s Secret Temple.

Danger Arena started the Atlantic City VGM craze when it debuted earlier this year. It was the first skill-based gambling terminal to appear in a United States casino.

GameCo uses the term “skill-based” to describe its games because their VGMs incorporate gaming skill into their platforms.

For example, gamblers who bet on Nothin’ but Net win their round by racking up the most points from made baskets. Those who play Danger Arena can win by shooting the most aliens during the game’s 45-60 second rounds of play.

Pharaoh’s Secret Temple works the same way, using gameplay similar to Candy Crush’s timer-based sequence challenge.

According to GameCo, the company’s VGMs offer a new sector of gaming that appeals to millennials who are tired of chance-based games like slots.

Things Looking Up? Atlantic City Could Be At The Start Of A Comeback

April 8, 2017
Atlantic City looking up

Based on recent developments, it certainly looks like Atlantic City is making a comeback.

Nearly two-and-a-half years after the city’s casino contraction of 2014, there are signs that the city could be moving toward an economic recovery. A recent article from U.S. News & World Report said, “Atlantic City’s casinos appear to be getting their groove back.”

Some of the optimism stems from the New Jersey Division of Gaming Enforcement‘s 2016 report, which showed that casino gaming revenue rose this past year.

Internet gambling providing a big boost

This rise in gaming revenue, year-on-year, was the first in 10 years, and is mainly due to the fact that online gambling has increased significantly since it was legalized in 2013.

Revenue from NJ gambling websites rose 32 percent in 2016 over 2015.

Golden Nugget and Borgata are the perennial revenue leaders, consistently posting around 40 percent of the state’s overall internet gambling revenue.

According to PlayNJ, Golden Nugget started out 2016 in the middle of the pack revenue-wise, before its Betfair online casino helped it surge ahead.

Focus on non-gaming revenues helps

It wasn’t just the casino gaming floors that saw promising increases in 2016, though. A trio of casinos made in convention center upgrades in the past few years:

  • Borgata: $11 million
  • Harrah’s: $125 million
  • Resorts: $9.4 million

The gem of this group is Harrah’s Waterfront Conference Center, which opened in 2015. The center includes 100,000 square feet of convention space.

These three upgrades, the Press of Atlantic City pointed out, contributed to a 23-percent increase in the number of trade shows, conventions and meetings held at Borgata, Harrahs’ and Resorts.

Harrah’s and Borgata, along with the Tropicana, have also invested millions in upgrading their clubs and pools to attract millennials.

Hard Rock purchase another bright spot

While the numbers we’ve discussed are from 2016, 2017 has also proved to be an encouraging one for Atlantic City’s renewal.

Hard Rock International announced this past month it finalized the purchase of the shuttered Trump Taj Mahal. Earlier this week, Hard Rock indicated it would spend $375 million to renovate the property.

Hard Rock estimates the hotel and casino will bring 3,000 new jobs to the area.

Atlantic City Isn’t Doing That Great, But Mayor Guardian Will Run Again Anyway

March 21, 2017
Guardian mayor AC casinos

A busted budget and a governor’s criticism weren’t enough to stop Atlantic City Mayor Don Guardian from announcing his run for re-election.

The beleaguered public servant’s announcement came recently in the City Hall Courtyard. Guardian’s speech focused on his office’s successes in the face of skepticism.

“We needed a new beginning beyond casinos,” Guardian said. “Four years ago, people said that I could never fix any of the problems that were plaguing Atlantic City. People said I could never reduce the size of city government, but we did by 350 employees and counting. People said that I could never reduce the city budget, but we did by $50 million annually and counting.”

Guardian went on to list other accomplishments, including improving the relationship between the police and citizens and acquiring tens of millions of dollars of funding for the city.

Of course, the big question is what a Guardian re-election would mean for Atlantic City’s casino industry.

Christie critical of Guardian’s budget handling

While Guardian may have improved certain aspects of Atlantic City’s finances and public relations, he fell short in what many consider his most important task: To dig Atlantic City out of its $500 million hole.

Last June, Gov. Chris Christie gave Guardian’s office five months to balance the budget, requiring that Guardian come up with a five-year plan to buoy the city’s finances.

Even before Christie offered a five-month reprieve to the city, he launched unashamed salvos at Guardian:

“Where’s his plan? He says he’s been prepared to do it. Where is it? It’s Day 145,” the governor said during a press conference. “Where is it? Tick tock, tick tock, tick tock. Where’s the plan, Mayor?”

Budget bungled, state takes over

At the conclusion of the five-month grace period, Guardian submitted a budget to the state.

Christie’s office reviewed it and released a report saying the budget wasn’t good enough to balance the city’s finances.

Charles Richman, author of the report and commissioner of the NJ Department of Community Affairs, said Guardian’s plan was a poor one.

“Based upon my review, there is little in the Plan to suggest what constructive actions have been initiated by the City since June 6, to show that it has the fortitude and the resolve to make the hard choices and difficult decisions at hand,” Richman said.

Because Guardian couldn’t provide a solution (at least one good enough for Christie), the state took over the city’s finances. The state even hired Guardian’s business administrator to assist in the takeover.

Guardian opposed casino expansion, but things have been looking up

One of Guardian’s smart moves this past year was his opposition to casino expansion into North Jersey.

There wasn’t much he could do though: The city was, naturally, bitterly opposed to the bill. Projections indicated multiple casinos would close if properties opened in the northern part of the state.

Whether Guardian, the state, or other market forces are responsible, things have seen an uptick of late in AC:

Shuttered Atlantic Club Set To Morph Into ‘Dolphin Village’ Water Park in AC

March 20, 2017
AC waterpark

The tales of what former Atlantic City casinos may become are many. Will plans for the former Atlantic Club come to fruition?

Here comes Dolphin Village

Glenn Straub’s plans for the former Revel included a shelter for refugees and a school for geniuses. More recently, grand plans have been made for two Boardwalk casinos. The Trump Taj Mahal will become part of the Hard Rock International chain.

And last week, R&R Development Group announced it will convert the Atlantic Club into an indoor water park called Dolphin Village. The news only added to the quirky collection of could-be’s — another developer had plans to use the property as a water park, but its bid fell through previously.

AC water park will be a family resort

According to Real Estate NJ, the new complex will be a 100,000-square-foot sprawl of dining, entertainment, with a plethora of wading pools and water rides. The resort will reportedly have 300 rooms.

The new developer will invest $135 million into the project, which could take between one and two years to build, the Press of Atlantic City wrote.

Ronald A. Young, managing partner at R&R, portrayed the water park like a playground for children of big spenders.

“Where can a high-roller send his kids?” he told the paper. “This complements every casino in the city.”

While we’re pretty certain Dolphin Village is intended to be more than a daycare for the rich and famous, there is an opportunity here for families to enjoy a kid-friendly environment just a few steps from the Boardwalk’s premier casinos.

The Atlantic Club’s history

The Atlantic Club was the first of four casinos to close in the dubious casino contraction that stated in 2014, ending a 34-year run in which the building had been either a casino or hotel.

The property opened in 1980 as the Golden Nugget. The Nugget was a hit with Atlantic City gamblers. According to a October 1981 article from UPI, the Nugget earned $17.7 million in the first half of 1981, “more than the other seven operating casinos combined.”

For contrast’s sake, the New Jersey Division of Gaming Enforcement announced earlier this month the state’s gambling websites alone earned $18.7 million.

In 1987, it became Bally’s. By 1998, Hilton took over and ran a hotel casino. Hilton held on for 13 years, at which point the property became the ACH Casino Resort. In 2012, the property evolved into the Atlantic Club Casino Hotel before closing its doors.

 

Atlantic City’s Credit Rating Goes Up, Future Still Looking Down

March 16, 2017
AC credit rating

S&P Global Ratings upgraded Atlantic City’s credit rating. Consider it one positive in the roller coaster ride that the New Jersey gambling hub has been on.

The city’s credit rating was in the basement. This upgrade — from CC to CCC — indicates Atlantic City has inched closer to the steps that lead to the first floor.

“These are early signs our efforts are working, that we will successfully revitalize Atlantic City and restore the luster of this jewel on the Jersey Shore,” said Brian Murray, a spokesperson from Gov. Chris Christie’s office.

Recent events, an S&P rep told NJ.com, led to the credit upgrade.

Takeover, settlement bolster city’s rating

According to S&P analyst Timothy Little, two factors contributed to the upgrade.

The AC takeover

Four months ago, the state moved in and took over the city’s finances. That came after Mayor Don Guardian and his council could not provide the state a feasible budget for reducing the city’s immediate and long-term debts.

It was a move that Christie had wanted to implement since he gave Guardian a budget deadline early in 2016.

The Borgata settlement

Perhaps the flagship of Atlantic City’s fleet of financial problems was its inability to pay Borgata $165 million in overpaid property taxes.

Considering the city was $500 million in debt, experts agreed a full payment of the Borgata debt was impossible.

And perhaps it was impossible under Guardian. However, Christie’s contingent was able to negotiate a deal. In a statement, the governor said the deal was one of his administration’s “priorities.”

Upgrade may be a temporary win

While news of the S&P upgrade was a much-needed boost to the city’s financial reputation, there are those in the industry who are skeptical that the upgraded rating will last.

Over the course of this year, the city is responsible for making monthly payments toward its debt. While the upcoming payments are reasonable — between $1 and $2 million — a $6.1 million installment looms in November.

An S&P analyst was quoted as saying, essentially, that the upgraded rating is a coat of fresh paint on a home with serious structural issues.

What’s interesting about S&P’s tenuous view of Atlantic City’s future is that it dampens the state’s fiscal accomplishments. Yes, the Borgata deal helped its finances. But the state has far bigger issues to deal with before financial experts give the city a passing bill of health.

There have been other good signs for AC of late, including

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