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Friday, August 22, 2014

Okay, Now What?

For a long time, New Jersey and Pennsylvania looked at the casino industry as free money.

Was there another option?

Atlantic City was a disaster.  It needed something, and for several years, it was the Las Vegas of the east. Now, the bloom is off the rose.  The economy is struggling.  NJ has competition from PA and NY.  Two Atlantic City casinos close this fall, and more might be on the way.

Pennsylvania was a little smarter.  It had the good fortune of sprinkling the casinos across the state, while NJ was stuck with rehabilitating a city on the verge of collapse.  PA gambling proponents said casinos would save the horse racing industry and provide property tax relief.  The horses are still here.  Property tax relief is another story.

It's inevitable.  Gambling revenue is destined to level off, and then dip a bit.  The novelty will wear off.  Casinos are upping their game by providing entertainment and other diversions to supplement the wagering.  Smart move.  It's a tough business.

It makes me wonder what the next cash cow will be.  Some states are experimenting with recreational marijuana.  Money is coming in, but a big hunk of it is spent on hiring more police officers to get those driving under the influence off the road.

It's a lesson we've learned over and over again.  There is no free lunch.