At 8am on Wednesday, July 5, executives at 12 casinos, 45,000 casino employees, thousands of suppliers and millions of visitors held their collective breath and watched in horror as the New Jersey State Police shut down the multi-billion dollar gaming industry in Atlantic City. It was part of a statewide budget crisis that closed all “non-essential” government offices for days.

The casino floors totally shut down for the first time since Resorts International first opened its doors in May 1978. The New Jersey State Police removed the last gamblers. As they roped off the area, an eerie silence pervaded the casino floors.

All 12 properties did remain open for business other than gaming. As one of the year’s busiest holiday weeks in the US, hundreds of thousands of vacationers and locals converged on the Jersey shore, seeking sun, sand, surf and slots. However, it proved dismal for business because room and restaurant cancellations poured in during the three-day shutdown.

Despite good weather and a packed Boardwalk, many people felt they had nowhere to go. Tourism suffered, which in turn hurt thousands of workers and vendors.

How did this happen, and what would it mean? Well, here’s a bit of abbreviated history. Following Governor Jon Corzine’s inauguration last January, he pledged to eliminate a “charge it” mentality that has gripped New Jersey for the past several years.

The state has been badly in debt for years. Corzine’s predecessors have often legally “fudged” the books, pushing the payment judgment day further down the road. By law, if the new state budget is not approved by June 30, the governor must halt state employment. He can no longer authorize payments and operations. In the past, state legislators performed creative financing to find a way to keep things going.

However, Corzine formerly chaired the giant Goldman Sachs investment group on Wall Street for years, and knows about money. He is said to have a personal net worth of more than $300 million, and only takes $1 in salary from New Jersey.

His solution involved raising the state sales tax by one percent on every dollar. Two vocal members of his own political party disagreed, believing that they would face angry voters in November. Corzine even accepted a compromise measure, which neither of these two yo-yos would consider.

As the Independence Day fireworks were shooting into the sky on July 4, Corzine and the legislature were burning the midnight oil to settle the dispute. He had ordered everyone back on the holiday to work this out. When that didn’t happen, all hell broke loose.

The casino industry went to court to prevent their closure. They argued the money allocated for enforcement does NOT come from any general tax revenues. The casinos themselves pay a separate fee for this enforcement, kept totally separate from the general funds.

Ironically, they pled their case in front of the judge, who as a young lawyer in the late 1970s, wrote the original Casino Control Act. He rejected their appeal, and more than 42,000 slot machines and 1,600 table games were rendered inactive on July 5.

Losses were staggering. The Borgata, Atlantic City’s newest casino, reported losses of $7 million in gaming revenue and about $3.5 million in gross operating profit. The Tropicana reported losses of $5 million in gaming revenue and $3.5 million in gross operating profit. Add another 10 properties to that mix, not to mention the more than $1 million per day in taxes paid to the state, and it is an ugly picture.

That’s the story. On Saturday, July 7, the casinos reopened after the governor and the state legislators finally reached an agreement. All seems to be back to normal, but lost time is lost money.

Currently, legislation is under discussion to prevent the Atlantic City casinos from ever closing again due to budget battles. Governor Corzine supports this plan. According to surveys, two-thirds of New Jersey’s citizens blame the legislators and not the governor. He was so determined to solve this catastrophe that he actually slept in his office during the crisis.

Count me among the majority who supported Corzine. He remained tough, and proved his leadership. Hey, would anyone that wealthy take the job unless he believed in his cause? Who needs that aggravation?

However, these politicos need to learn that posturing for days costs real people real money. Thousands were furloughed for those few days, and it is impossible to recoup their salaries and tips. While apologizing is nice, we have to hold them accountable for affecting those who just want to do an honest day’s work, get paid and live their lives.

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