New Yorkers have approved an amendment that will allow seven casinos to open in the state, including one to three in the New York City area in seven years. And that could sound the death knell for Atlantic City, already struggling under the weight of regional competition.

Atlantic City should be "very concerned," said Chad Mollman, an analyst who covers casino and hotel stocks for Morningstar. "New York City is the biggest feeder market in Atlantic City. There is a question in terms of the viability of Atlantic City in the long term."

Resorts was the first legal casino on the East Coast when it opened in Atlantic City in 1978. A lot has changed since then.

"Atlantic City's time has come and gone," said Harold Vogel, the CEO of Vogel Capital Management and the author of the bedrock textbook "Entertainment Industry Economics: A Guide for Financial Analysis." "It was second after Nevada, and it was a special place in a small location. It had 10 good years when it was pretty unique, but then we got Indian casinos, and then gambling in Pennsylvania."

(Read more: Stronger than the storm? Maybe not Atlantic City)

Part of the rationale for opening casinos in New York has been that it will capture gambling money that has been going to Atlantic City and other places.

The New York Daily News reported that Gov. Andrew Cuomo made the case for the casino amendment by telling the press, "New Jersey has casinos. Connecticut has casinos. Pennsylvania has casinos. We literally hemorrhage people from the borders who go to casinos. I think it will keep the money in this state and I think it is a major economic development vehicle for the Hudson Valley especially and for upstate New York."

If New York money stops crossing the southern border, Atlantic City is in big trouble.

Richard "Skip" Bronson, the chairman of U.S. Digital Gaming and the author of "The War at the Shore," which chronicled his effort to build a luxury Mirage Resorts casino in Atlantic City, said New York casinos will make a bad situation even worse.

"There are only so many gambling dollars in the pot," Bronson said. "And there has been a massive proliferation of casinos throughout America. It's a form of real estate, and like any form of real estate, it goes through a cycle: Demand, saturation, and then glut. A place like Atlantic City has too many casino hotels and too many rooms. This is a fact of life."