Atlantic City is abuzz with the news that Beyonce plans to perform to help hype the April 2nd opening of the lavish Revel casino. The struggling gambling town hopes the $2.4 billion casino resort provides a much needed shot in the arm. But for the seaside resort, the arrival of the Revel is more likely to be a last gasp.
The Revel may help hide some of the underlying problems facing Atlantic City. But the reality is this: Stick a fork in AC. Its best days are over.
Thirty-plus years of casino gambling has failed to revive A.C. Governor Christie’s latest plan to transform the town is pretty much window dressing and less government regulation. Despite the addition of a flashy casino, gambling revenues are expected to continue to drop in the coming years. (Full disclosure: I edit an anti-gambling blog.)
The big problem facing Atlantic City is competition. The 2004 legalization of casinos in Pennsylvania is killing Atlantic City. Gambling revenues in A.C. are down 30 percent since 2006. A PricewaterhouseCoopers study said revenues will drop by another 22 percent by 2015.
Sure, the economy is showing signs of rebound, but more trouble looms for Atlantic City. Last week, lawmakers in New York took the first step toward legalizing commercial casinos there. The process requires changing the state’s constitution, which requires a voter referendum expected to occur in November 2013.
The opening of casinos in New York could be the knock-out punch. Just as Pennsylvania gamblers no longer need to schlep to A.C., New Yorkers can stay home and blow their money. In fact, train service from Manhattan to Atlantic City just ended.
Likewise, many North Jersey gamblers may find it easier to go to New York. That may prompt Trenton lawmakers to legalize gambling at the Meadowlands, something that has been discussed often over the years. That will siphon off even more business from A.C. More casino competition is coming soon from other nearby states, including Maryland and Massachusetts.
The upshot: More casinos and limited gambling dollars mean fewer visitors in Atlantic City. That will add to A.C.’s decay. To be sure, Atlantic City has never lived up to the promise. A number of casinos have been in and out of bankruptcy in recent years. Even the Revel needed a state bailout to finish getting built. Many hope the Revel will attract more gamblers, but it is just as likely to take away business from the other A.C. casinos, further weakening them.
One casino, the Atlantic Club, is shifting its focus and going after low rollers by offering $1 bets on roulette and beefing up the payout on its penny slot machines. The casino is also offering hotel rooms for as little as $19 a night.
Don’t recognize the Atlantic Club? That’s because the casino—formerly the Hilton—is on its third name in a year. Now it is becoming the Walmart of casinos by offering everyday low prices.
Is it a winning strategy or a sign of desperation? One thing is sure: Atlantic City continues to lose its allure—if it ever had any. The Miss America pageant left town a few years ago. If anything, gambling has hurt Atlantic City more than it is has helped. There has been a corrupting influence on the local government that has resulted in a string of mayors and other elected officials getting indicted. Short of a nice strip of outlet stores, Atlantic City remains pretty much a dump. Meanwhile, property values in other Jersey Shore towns have soared since casinos were legalized.
A 1999 report by the National Gambling Impact Study Commission found that casinos hurt other businesses. “Many of the ‘local’ businesses remaining are pawnshops, cash-for-gold stores and discount outlets,” the report said. The number of bars and restaurants in Atlantic City dropped from 311 in 1978, when casinos first opened, to 66 in 1999.
That was more than a decade ago. Since then, things have only gotten worse for Atlantic City. The Revel may provide a positive blip, but not a revival.