Aug 4 Casino towns Las Vegas and Atlantic City
were both hit hard by the real estate bust and weakening gaming
industry, but Las Vegas has seen a stronger economic recovery,
reflected in the city's better credit rating, Moody's Investment
Service reported on Monday.
Casinos dominate the economies of both cities, but Las Vegas
enjoyed a stronger rebound from the Great Recession thanks to
regional demographics, economic diversity, and competitive
pressures. New Jersey's Atlantic City, in contrast, remains
eight notches below the Nevada city, Moody's outlined.
Las Vegas relies less on gaming revenue from casinos and has
generated funding from other areas such as conventions and
Meanwhile, Atlantic City has suffered from a high poverty
rate, stagnating population growth, and one of the largest local
unemployment rates in the country at 14.9 percent.
"The greater Las Vegas metropolitan area is supporting
long-term growth in construction, commercial activity and has
elements of a nascent tech economy. It also is a popular
retirement destination and has a growing healthcare sector,"
Moody's reported. "Atlantic City, in contrast, is almost
entirely dependent on casinos and gambling tourism."
Moody's rates Las Vegas at Aa2 with a stable outlook, while
Atlantic City is Ba1 with a negative outlook. In 2010, Las
Vegas' rating was only three rating notches higher than Atlantic
City's A1 rating.
While neither city receives direct tax revenues from gaming,
casino win revenue is an indicator of property tax values and
overall economic health.
In Atlantic City, the tax base is substantially concentrated
in casinos, with a dozen casinos making up 68 percent of the
assessed value. All 12 casinos filed tax appeals in recent
years. As a result, Atlantic City paid significant property tax
refunds, financed by most of its $300 million of municipal debt
issued since 2008.
"These appeals have not only challenged the city's reserves
in recent years but could also increase the city's debt burden,"
reported Moody's. "Las Vegas does not face the same taxpayer
concentration as seen in Atlantic City, and is not financially
exposed to the same risk of taxpayer appeals."
From 2008 to 2013, property values in both cities fell by
roughly 50 percent. But while Las Vegas has seen an improving
real estate market, Atlantic City continues to suffer declines.
The impact of the housing market has been felt differently
in each city as property taxes account for only 16 percent of
Las Vegas's total city revenues, while Atlantic City's totals
As Las Vegas diversifies its economy into healthcare and
technology, Atlantic City has felt encroaching competition from
new casinos in Pennsylvania, Delaware, Maryland, and soon, New
York, which has plans to expand gaming.
(Reporting By Robin Respaut; Editing by David Gregorio)