I live near Atlantic City, currently in the midst of an economic schizophrenia. On one side, stormy news struck this summer of sunshine and big crowds. Three casinos – Revel, Showboat and Trump Plaza – were to close by mid-September. Almost 6,500 people would lose their jobs.
Every regional municipality, including mine, faces multiple implications, like depressed property values, higher taxes and less indirect business throughout the area. Of my township’s 4783 casino employees, 830 (17.5%) worked at these venues.
What happened? Past ineffective, corrupt city governments, proven by incarceration for numerous former city officials, have plagued Atlantic City. Although regulations loosened and profits peaked at more than $5 billion in 2006, years of negligible planning took their toll by delaying upgrades and improvements. Governor Chris Christie’s 2010 economic study revealed mismanagement of $23 million, resulting in the State assuming the city’s finances and tourism.
Each casino faced different problems. Operational and structural challenges plagued Revel since its 2012 opening. A great mid-Boardwalk location could not save the outdated Trump Plaza.
Caesars caused the greatest uproar by closing Showboat despite a $7.6 million second quarter profit. Although Caesars still operates three Atlantic City casinos – Bally’s Caesars and Harrah’s – Chairman Gary Loveman and company have few friends and limited good will here.
A regional conglomerate wants to buy Showboat to develop an entertainment-based site with a small casino. It could permanently employ 1,200-1,600. However, as in prior sales, a deed restriction could void the sale. Caesars has prevented The Claridge and Atlantic Club owners, its former properties, from operating casinos.
A local assemblyman seeks to stop deed restrictions concerning Showboat. He envisions Caesars‘ rejection of a potential sale as an attempt to eliminate competition. Appealing for hearings before the Division of Gaming Enforcement , the legislator urged retroactively voiding Caesars’s prior deed restrictions. I’m unclear as to a legal standing.
Caesars remains silent.
While I usually support private business rights, this defines chutzpah. Closing an organization, laying people off and then rejecting a buyer to remove competition reeks of bad faith.
Contrasting the gloomy casino scenario, as regional competition erodes gaming revenues, Atlantic City’s non-gaming amenities are booming. The local economy could earn at least $1.6 billion from non-gaming amenities this year.
Two successful beach concerts, totaling 120,000 attendees, motivated the scheduling of 10 more major events. An estimated 800,000 watched the one-day air show. Boxing matches and international athletic/sporting events are big business and dozens more are planned. In this issue, read how nightclubs boost casinos nationwide, specifically in Las Vegas and Atlantic City.
Restaurants are crowded and the shopping district continues to expand. The beautifully-renovated Claridge reflects the building’s original 1920s history; plans for the Atlantic Club and another Boardwalk site are underway.
Two years remain on Christie’s five-year commitment to revitalize Atlantic City. The future depends on attracting “bodies” into town who want to eat, sleep, drink, shop, be entertained and pampered. Increased airport traffic, improved highways and a statewide Internet gaming program are a good start. Unfortunately, sports betting, long a dream of many legislators and Christie, seems unattainable at this time.
Admittedly, we are years behind Las Vegas. Its gaming industry is again flourishing, thanks to more international travelers. Visiting Mississippi in 2011, I witnessed the Gulf Coast‘s reconstruction after Hurricane Katrina. Ironically, the 2005 storm provided opportunities to correct infrastructure problems.
Reinvention is always possible; businesses who can’t change often disappear. For example, as smoking became less popular in the 1980s, my family’s vending company withstood declining tobacco sales. Lowering prices and battling ever-increasing regulations could not salvage former revenue levels. Our solution? Retrofit equipment for candy vending, launch a snack vending service division and introduce competitive amusement machine leagues. One door closing opened another.
In Atlantic City, some people have already secured positions in neighboring casino jurisdictions. Some will change industries, thanks to opportunities found at local job fairs. Others will never recover and will fall behind.
I remain optimistic about Atlantic City reemerging; gaming will be one additional amenity. We have the necessary elements for success.
As a current “Jersey Girl,” I have learned this state is full of determined, tough people. If it can be done, it will be.