RENEE MONTAGNE, host:
There's an old line among gamblers: The only way to make money in a casino is to own it. The line still rings true but Atlantic City, New Jersey casinos are finding that it's not as easy to do as it once was. Casinos there saw profits fall as competitors from neighboring states elbowed their way onto the gambling table.
NPR's Mike Pesca has the story.
(Soundbite of song, "Tea for Two")
Unidentified Woman: (Singing) Tea for two, and two for tea.
MIKE PESCA: The musical "No, No, Nanette," which took place in Atlantic City, brought us "Tea for Two," a jaunty little melody that sort of mimics the happy tune sung by casino operators since 1978.
Every year, revenue increased. And every year, casino operators could congratulate themselves on figuring out the market: Throw Mel Torme tickets and limo rides at the big-time whales who drop tens of thousands dollars a visit, and round out your fortunes by busing in little old ladies eager to slide their quarters into slot machines.
Oh, so it's a gross stereotype, but things were simple then. If you owned a casino, you sang this little tune all the way to…
(Soundbite of music)
PESCA: …all the way to last year, when for the first time ever, revenues declined. Sure, the casinos took in almost $5 billion, but the year before that it was over 5 billion. The old way of doing things stopped seeming reliable and started seeming antiquated.
Michael Pollack is a longtime casino consultant and publisher of the Gaming Industry Observer.
Mr. MICHAEL POLLACK (Publisher, Gaming Industry Observer): You've got to understand that, for most of its existence, Atlantic City largely had a monopoly on East Coast casinos. In that earlier era, you did not have to work particularly hard to operate at something close to capacity. The customers were there because they really couldn't go anywhere else.
PESCA: But now they can, and do. Two huge Indian casinos in Connecticut opened a decade ago. That hurt Atlantic City. Casinos at racetracks in Pennsylvania and Delaware are cutting into Atlantic City's profits. Even a new slots-only parlor in Yonkers, New York, is drawing away visitors.
Dawn Canella is from Wallington, New Jersey.
Ms. DAWN CANELLA: I play lots of the penny progressives. And I've been coming to Yonkers because it's closer.
PESCA: Do you think that the Atlantic City casinos were taking slot players like you for granted a little bit?
Ms. CANELLA: Yes, I think so.
PESCA: Canella is the type of gambler who has been written off by Atlantic City's leading casino. The Borgata has gone after more upscale, youthful people who were once Atlantic City rejecters. That's the Borgata internal marketing term.
Michael Facenda, the director of marketing services at the Borgata, says that when his casino was built in 2003, the rest of the town was fairly dismissive.
Mr. MICHAEL FACENDA (Director of marketing services, Borgata): Yeah, I think they were a bit on cruise control. Bonus checks were coming in, and things were good. If it ain't broken, don't fix it, I think was the mindset. When we came in, we just knew that there could be more.
PESCA: Today, the Borgata is Atlantic City's most profitable casino and an exception to the rule of declining revenue.
On the gaming floor of the Borgata, the roulette wheel spins true, and a hard eight pays an abysmal 9-to-1, just like everywhere else. By law, the games can't change. But the Borgata makes sure everything else stands out - spas, restaurants, bars, concert tickets. What Michael Pollock calls…
Mr. POLLOCK: Other cash registers on the floor, not just the casino.
PESCA: This den of slot machines isn't in Atlantic City, but back at that casino in Yonkers, three miles north of New York City. Bobby Alameda, an Atlantic City casino veteran, is promotion booth supervisor here at Empire City Casino.
Mr. BOBBY ALAMEDA (Promotions Booth Supervisor, Empire City Casino): I know for a fact that we're hurting Atlantic City because a lot of their high rollers are coming here, and they love it here because they're minutes away.
PESCA: The noise behind Bobby is notable for what you don't hear. No cries of shooter coming out. No calls of dealer busts - no verbiage of any of the table games or poker or keno.
Empire City's the newest trend in casinos, a slots-only facility called a racino, meaning a racetrack plus a casino. Racinos are proving to be a burr in the saddle of Atlantic City, while at the same time promising salvation for the horse-racing industry. They're the newest temptation for gamblers and governors throughout the country.
Mike Pesca, NPR News, New York.
MONTAGNE: Tonight on ALL THINGS CONSIDERED, Mike Pesca looks at the racino industry and how the combination racetrack and slot parlors are catching on around the country. And if you're feeling lucky, you can take a virtual tour of Atlantic City, old and new, at npr.org.
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