Casino closings threaten Atlantic City
Three premier Atlantic City casinos will be closing in the next two weeks with the lost of almost 6,000 jobs. Another casino closed earlier this year, making the total job loss close to 8,000 - one quarter of casino employment in the city.
Over the last few years, tax revenue from casinos has fallen precipitously which have led to massive budget problems for the city. The recession is to blame, but Atlantic City's problems go deeper than it being a one industry town.
The closing of three casinos, starting with Showboat and Revel this weekend followed by Trump Plaza two weeks later, and the rapid-fire loss of 5,700 jobs, draw historic comparisons to longer-term collapses of U.S. industries such as steel.
"This is a massive economic body blow to Atlantic City on par with the hit to the national economy during the Great Recession," said Mark Zandi, chief economist at Moody's Analytics in West Chester.
Beyond the thousands of job losses, which will spread into related industries and the general economy, Atlantic City will soon be left with four empty buildings (including the shuttered Atlantic Club) that have no clear future.
"What we've got in Atlantic City is unprecedented. It hasn't happened before in this type of context, where they are going to shutter them up and literally can't give them away for pennies on the dollar, like Revel," said Alan Silver, a former casino-industry executive who teaches at Ohio University in Athens, Ohio.
Silver and other casino-industry experts said there was little precedent for reusing casinos for anything other than hotels.
David G. Schwartz, director of the Center for Gaming Research at the University of Nevada in Las Vegas, could point to only one former casino in the United States - the Golden Phoenix in Reno - which was turned into condominiums.
In addition to condominiums and time-shares, experts are quick to mention boutique hotels, which have become increasingly popular in Las Vegas and other cities.
"It's nice to do all these things, but you've got to have supply and demand and you've got to have the various attractions there to get people to come to Atlantic City," Silver said.
Atlantic City Mayor Don Guardian, who has adopted a salesman-in-chief attitude since taking office in January, spoke optimistically last week of openings expected next year, including a Bass Pro Shops location and Harrah's Conference Center, that could create 1,300 jobs in the city.
Guardian expressed confidence Friday that Revel would be resurrected as a casino under a new name, projecting that it would sell for $25 million to $50 million. That would also reduce the job losses.
"At $50 million, it's certainly a bargain-basement price for a brand-new facility. It's finding the right buyer, meaning having the financial wherewithal, and then that buyer finding the right brand to come in and run it," he said.
The hope that casinos would revitalize Atlantic City proved to be false. Despite the gleaming towers and swanky hotels, the rest of Atlantic City is still a grimy, crime-ridden mess. We've seen this same selling point by casnino operators fall flat here in Illinois. Gambling brings its own set of problems to a community and residents should think very carefully about approving one.
Massachusetts might become the first state to actually repeal casnino gambling. There's a ballot measure in November that will decide the fate of casino gaming. Some other states have decided against expanding casino gambling. Whatever extra cash flowing into state coffers, the social cost is sometimes too high a price to pay.