New Jersey takeover of Atlantic City district too late: Moody's

NEW YORK (Reuters) - New Jersey Governor Chris Christie's plan to take over the Atlantic City gambling district comes too late to help its struggling casino industry, which will remain under pressure from competition in neighboring states, Moody's Investors Service said on Monday.

"Even with Gov. Christie's backing, New Jersey casinos face an uphill climb to come back," Moody's analyst Peggy Holloway said in a note.

Christie's plan, which is based on the recommendations of a special committee, aims to revitalize the industry, prop up city finances and create a family-friendly year-round center similar to Las Vegas.

The governor is further aiming to increase meeting and convention business by 30 percent a year for the next five years, improve the state's regulatory structure by cutting costs and redundancies and improve transportation options.

However, "conveniently located, state-of-the-art facilities superior in quality to New Jersey's aging casinos have recently begun operating in neighboring states," said Holloway.

"Casino operators there will continue to focus on stealing market share by building customer loyalty and maintaining a competitive product."

Pennsylvania offers an extra draw after lawmakers approved table gaming at casinos close to Philadelphia, she said. The Keystone state is expected to expand hotel rooms, helping to boost visitation and grow revenue at the casinos.

Atlantic City's gaming revenue fell to $3.9 billion in 2009 from $5.2 billion in 2006, and have shrunk another 7.8 percent in 2010 so far.

Holloway said the committee's decision not to also recommend adding slots at the Meadowlands Racetrack in northern New Jersey was a positive. Adding slots would only further cannibalize revenue at Atlantic City, she said.

Still, the recommendations must be approved by a legislature that is controlled by Democrats, some of whom have long lobbied to bring gambling to the Meadowlands, she said.

(Reporting by Ciara Linnane; )