April 16--PHILADELPHIA -- Atlantic City's recovery from its lengthy slump may depend on some of the weaker casinos going out of business and the survivors benefiting from a smaller, though more profitable gambling market, analysts asserted Tuesday.

The survival-of-the-fittest strategy was debated during the Pennsylvania Gaming Congress, an industry conference that focused largely on Atlantic City's plight and the prospects for a turnaround following six straight years of declining casino revenue.

During one panel discussion, Wall Street analysts argued that Atlantic City will likely never return to its $5 billion heyday and that it may be better for the unprofitable casinos to close down because there is simply too much supply in the shrinking market.

"We would like to see a couple of them shut down," Christopher Jones, managing director of the Telsey Group of New York, said bluntly.

In an interview later, Jones mentioned Resorts Casino Hotel and the Atlantic Club Casino Hotel as the properties he sees as the most likely candidates for closing down. However, he believes that the troubled $2.4 billion Revel megaresort will survive once it restructures itself in bankruptcy and emerges under new ownership.

Adam Steinberg, a veteran casino analyst and president of A.M. Steinberg Advisors, also argued during the panel discussion that it would be better for Atlantic City's overall financial health if some of the unprofitable casinos folded. He did not name names.

Afterward, Steinberg said in an interview that New Jersey should buy the weakest casinos and demolish them to create green that would enhance the city's appearance. With fewer competitors around, the stronger, surviving casinos would have greater incentive to invest in their properties to make Atlantic City even more attractive to visitors, Steinberg added.

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