The New Jersey Casino Experiment Has Failed
How low can Atlantic City casinos go? The numbers for 2013 aren’t looking very good — for N.J.’s gambling resort, or for casinos across the country.
Last year, Atlantic City’s casinos brought in $235 million in gambling earnings. That’s bad — 35 percent less than 2012 —and even worse given the following:
- The 2013 number includes the introduction of the much ballyhooed Internet gambling that was supposed to be the latest and greatest thing to save Atlantic City. Apparently not.
- The 2013 earnings are still down 35 percent even when being compared to those of 2012, a year that included Superstorm Sandy. The storm shut down casinos entirely and slowed business for months after.
It’s not getting any better this year, either.
In 2014, one casino (the Atlantic Club) has already shut down, and Revel, which was another of the city’s latest and greatest hopes, is up for sale post-bankruptcy. Talk about adding a casino to the Meadowlands has turned from a whisper into a rallying cry as Gov. Chris Christie, who once stood in front of Revel and begged Bruce Springsteen to play there, has said that Atlantic City casinos had better shape up or lose their state gambling monopoly. Atlantic City’s already lost its East Coast monopoly — I’m not sure what adding another casino in N.J. will do to these already falling numbers.
Casinos were brought to Atlantic City in the 1970s with the promise of pulling the city out of poverty — to create jobs and give a breath of new life to a struggling town (the film American Hustle focuses on this push). Today, more than 30 percent of Atlantic City residents live below the poverty line, and the unemployment rate of 13.8 percent is one of the highest in the country. The Borgata fought for and won a tax appeal that that turned into a nearly $50 million refund, and new mayor has threatened a 47 percent local tax increase if they don’t get additional help.
What does this mean for Atlantic City? As runners say, “the only way to is through” — and not through gambling. Matt Levinson, chairman of the New Jersey Casino control Commission told the Associated Press that luxury, hotel, tourism and sales taxes hit record highs last year. That’s a good sign. I don’t gamble, but I have as much fun bar hopping and fine dining and boardwalk strolling and spa relaxing and outlet shopping and concert going in Atlantic City as any other tourist. The town has a lot to offer someone who wants a beachfront vacation, and pulling the focus away from gambling lets all of those other things shine. But tourism has a long way to go to make up for gambling losses, and to stabilize the town financially.
This isn’t just an Atlantic City problem, either. Nation-wide, casinos aren’t turning into the profit centers their owners once promised either.
The casino experiment in Atlantic City has failed, and its story should serve as a warning to those pushing for that second Philadelphia casino license to plop a gambling hall in their backyards. The backers in Philadelphia are saying the same things that were said in Atlantic City 40 years ago. Take a lesson from your seashore neighbors, Philadelphia. Gambling just doesn’t pay out.
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