A casino boom made the New Jersey city the gambling capital of the east coast. Now it is over
By the middle of this month, Atlantic City, which started the year with 12 casinos, will be down to eight, as the lights go out over vast swathes of the resort’s famous boardwalk.
At a meeting organised by Local 54 of the Unite Here trade union, David McGettigan, a local pastor, likened the impact of the closures on the local economy to that of a natural disaster.
Ruth Ann Joyce, 58, said as she waited to sign on for benefits: “My husband Michael and I worked at the Showboat as bartenders since it opened in 1987, more than 27 years ago. Our jobs were good union jobs with great benefits. That was the promise made when casinos first came to town. We raised our two sons on our good jobs.”
Like many of the unemployed casino workers, Ronnie Downing, 56, who worked in the Revel’s stewarding department, blames bad management for the closures and believes that some casinos could be reopened, possibly as hotels. “The trouble with this industry is that it has been taken over by Wall Street, real estate investment trusts and hedge funds. They have changed it. They don’t believe in the personal touch or service, just numbers,” he said.
Industry analysts say that the numbers are stacked against Atlantic City and insist that the closures are a necessary remedy for an oversaturation that started after New Jersey legalised gambling in 1976, and that has been compounded in recent years by overreach and greed.
“Seven years ago, when Atlantic City was at its height, casino revenues were $5.2 billion. Now that figure is $2.8 billion. There is clearly overcapacity,” Roger Gros, an analyst and publisher of Global Gaming Business Magazine, said. “The closures are a tragedy for the workers, but good for the industry.”
He blames Atlantic City’s decline principally on a proliferation of rival casinos opened recently in the nearby states of Pennsylvania, New York and Maryland that have drawn away “convenience gamers”, who like to gamble at venues that are close to home.
Showboat’s owner, Caesars Entertainment, closed the still profitable establishment to protect its three other casinos in the city — Bally’s, Harrah’s and Caesars. Similarly, Trump Entertainment is closing the Trump Plaza to protect its other Atlantic City casino, the Trump Taj Mahal.
The reasons for the Revel’s closure are more complex. Opened less than two years ago and initially backed by Morgan Stanley, the glass and steel monstrosity was folly on wheels from day one. Aiming to cater for an upmarket audience that never materialised, it was weighed down by an exorbitant $3 million-a-month energy contract that it could neither justify nor afford.
Ray Lesniak, a New Jersey state senator, believes that Atlantic City’s best hope for creating new jobs is to concentrate on rebranding itself as a resort with a few casinos, rather than a casino destination. “This means investing in other attractions, such as museums, and promoting the beach and the boardwalk more,” he said.
It has taken the first step. Having lured the Miss America Pageant back to its traditional Atlantic City home last year, seven years after the contest defected to Las Vegas, a rival casino hub, it hopes that the contest will generate $30 million a year in revenue — as well as a bit of much-needed pizzazz.