The work of this
Commission was undertaken against a background of developing interest,
both in this State and nationwide, in the potential benefits of legalized
gambling. The reasons for this interest appear to be connected with
certain emerging social and political trends, and (as typically expressed
by proponents) are essentially threefold:
1. In an era of fiscal stringency, legalized gambling holds forth
a promise of providing substantial revenues through as nearly a "painless" method as can be conceived.
2. In an era increasingly vexed by problems of crime and corruption,
legalization of gambling is put forward as a means of (a) undercutting
organized crime by depriving it of the revenues which it now derives
from illegal gambling, most of which it controls; (b) freeing law-enforcement
manpower and resources for use against both the "organized crime"
and the violent "street crime" which alarm the citizenry and
undermine social order, and (c) eliminating opportunities and temptations
for the corruption of various public officials whose protection or connivance
is necessary to the survival of most illegal gambling operations.
3. In an era when assertion of personal liberty against state
control has been ever more vociferously expressed, the legalization
of gambling would remove restrictions on personal action which many
people resent as puritanical, hypocritical, repressive and archaic.
State
of New Jersey Gambling Study Commission, 1973
This quotation shows
the sentiments that surrounded the legalization of casino gaming in Atlantic
City in 1976. This was a radical step in American gaming history, as the
casino resort would soon find a home outside of Nevada. Over twenty-five
years later, it is clear that casino gaming in Atlantic City has had an
uneven impact--it has created jobs and economic growth, but has not "rehabilitated" Atlantic City itself in the ways that proponents had hoped. This was because
of the form of gaming introduced; New Jersey law specifies that all gaming
must take place in self-contained casino resorts. Thus, it is not surprising
that, as in Southern Nevada, casino resorts have been engines of regional
growth but have not knitted together the fabric of urban life.
Atlantic City had
a history as a seaside resort dating back to the late 19th century. Like
Las Vegas, it was a railroad town, founded in a fit of land speculation
by railroad interests and promoted as a vacation getaway for the affluent
and laboring classes alike. By the 1960s, competing resorts, a crumbling
infrastructure, and deteriorating hotel facilities made the town a shadow
of its former self. Atlantic City, a resort once billed as the "World's
Playground" had fallen on hard times. Its low ebb came with the 1964
Democratic Convention, which revealed it to the nation as a city with
decaying hotels, an inadequate infrastructure, and few attractions. Ironically,
the proliferation of cheap air travel, which had brought sustenance to
Nevada casinos, was one of the chief reasons for the decline of Atlantic
City as a tourist destination. As more and more people could afford to
hop on a plane to Nevada, Florida, or the Caribbean, fewer found a vacation
in Atlantic City's aging hotels attractive. A local coalition of business
interests and citizens clamored for the introduction of legal casino gaming.
It was thought that casinos would jump start Atlantic City's economy by
providing employment and increasing its appeal to potential tourists.
Additionally, gambling proponents stressed that state revenue garnered
from casino taxes could be used to benefit citizens of the entire state.
Although a referendum
that would have legalized state-run casinos throughout the state failed
in 1974, the measure, in truncated form, was put to the voters again in
1976. This referendum specified that casinos would be privately owned,
state regulated, and restricted to Atlantic City. Tax revenue raised by
casino gaming would be dedicated to programs that assisted the elderly
and disabled. As the result of vigorous lobbying and voter education efforts
by a number of groups, the referendum passed. The Casino Control Act,
the enabling legislation that set up the state's superintending of Atlantic
City's legalized gaming, declared that casino gaming was a "unique
tool for urban redevelopment" that would "facilitate the redevelopment
of existed blighted areas, and the refurbishing and expansion" of
the region's tourist facilities.
The Casino Control
Act further specified that all gambling in Atlantic City take place within
the confines of casino resorts. The Act declared that the "rehabilitation
and redevelopment" of Atlantic City's resort business would offer
a "unique opportunity" to make maximum use of the natural resources
available in Atlantic City" to effect "the restoration of Atlantic
City as the Playground of the World and the major hospitality center of
the Eastern United States. Regarding the structure of the casino industry,
the Act stated:
"Restricting the issuance of casino licenses to major hotel and convention
facilities [casino resorts] is designed to assure that the existing nature
and tone of the hospitality industry in New Jersey and Atlantic City is
preserved, and that the casino rooms licensed pursuant to the provisions
of this act are always offered and maintained as an integral element of
such hospitality facilities, rather than as the industry unto themselves
that they have become in other jurisdictions. "
Thus, Atlantic City represented more than the laissez faire legalization
of gambling. The state, with full public approval, actually mandated that
casinos hew to the casino resort paradigm to promote development and created
a very proactive regulatory regime that involved state officials in the
day to day operation of ostensibly private businesses. This marks, of
course, the ultimate acceptance of the casino resort as an institution,
but it also raises concerns about the suitability of the casino resort
for the originally-intended purposes of Atlantic City gaming.
The first casino resort,
Resorts International, opened in 1978 in a renovated Chalfonte-Haddon
Hall on the Boardwalk. Its wild success encouraged an explosion of casino
development. The casinos themselves were typical Stern derivatives (in
fact several were designed by him) with gaming, lodging, and entertainment
with an attached parking garage and showy porte cochere. As the market
has expanded, though, most Atlantic City properties have added additional
hotel towers and gaming space, thus recreating the hodge-podge architecture
of the Strip. Trump Plaza, as representative of the typical Atlantic City
casino as any, followed this pattern. It opened with a 555 room, 31-story
tower but has since added another hotel tower (part of a failed Penthouse
casino project) which has 349 rooms and suites. As of December 2000, it
had 85,738 sq. ft. of casino space, with 2,863 slots and 97 tables games.
Other attractions included 18, 157 sq. ft of convention space, a 750-seat
theater, four cocktail lounges, ten restaurants, a health spa, and retail
shopping. It looks like a typical older Strip casino with one exception:
it has a bus center with 14 gates, and draws about 35% of its visitors
from bus patrons. With this adaptation to the greater proportion of bus-in
patrons available in the mid-Atlantic region, the casino resort was easily
transplanted onto Absecon Island.
Drawing on an expanded "locals" market that includes a large chunk of the mid-Atlantic,
Atlantic City casinos have established a strong market niche and secured
its reputation as the casino capital of the East and the number two gaming
market in the nation, behind of course the Las Vegas Strip. By the early
1990s, the city hosted thirteen casino resorts along the boardwalk and
in its Marina section. Until the 1999 openings of Paris, the Venetian,
and Mandalay Bay on the Strip, Atlantic City consistently out-earned the
Strip in gaming revenue. However, the gaming industry in Atlantic City
has failed to make the jump, as newer Strip properties have, to significant
non-gaming components. While nongaming revenue is about 50% of the Strip's
total revenue, it is only 19% of the Atlantic City market's earnings.
The casino industry
spurred a dramatic revival of the Atlantic City's tourist trade; in 1985,
the city welcomed over 29 million visitors (in the late 1990s, annual
visitation would be well of 33 million), far more than had been expected
when gaming was first proposed. These numbers, though, must be taken with
the caveat that many of these "tourists" never leave the confines
of "their" casino resort. Casinos directly created over 50,000
jobs in Atlantic City and attracted billions of dollars in investment.
Local vendors and contractors serve the industry, and casino paychecks
provide the backbone for the area's economy.
Within the city itself,
there have been a host of civic improvements, including the construction
of new housing units, the construction of a new convention center, the
renovation of the hallowed boardwalk Convention Hall, and the attraction
of minor league sports franchises. Much of the city's housing stock has
been rejuventated, and infrastructural improvements have made the city
(and its casinos) more accessible. The tax revenues produced by casinos
were directed towards a number of socially useful programs, including
the Casino Redevelopment Authority and statewide programs for seniors.
In several regards, Atlantic City's turn to the casino resort was more
successful than could have been imagined.
But critics of the
casino resort in Atlantic City charge that it has enriched casino operators,
real estate speculators, and other interested parties at the expense of
the citizenry of Atlantic City. Astute critics have realized that the
very instrument of Atlantic City's boom, the casino resort, is also responsible
for its relative lack of redevelopment:
"The laws that established casinos made them islands unto themselves;
they were constructed to be self-contained cities. The purpose of the
casino was to gamble. To keep the public gambling, everything had to be
provided within the casino: drink, dining, exercise, sleep, entertainment,
and shopping." (Denis P. Rudd. "The Social Impacts of Atlantic
City Casino Gaming." In Cathy H. C. Hsu, ed. Legalized Casino
Gaming in the United States: The Economic and Social Impact. New York:
The Hapworth Hospitality Press, 1999. 213.) Obviously, the suburban institution
that had sparked the growth of Las Vegas, the casino resort, could not
be expected to produce an urban revival, at least one contained
within the small confines of Atlantic City itself, a municipality of less
than 40,000 residents.
One of the tenets
of the original pro-casino campaign was that the construction of casino
resorts would in fact create an urban structure where restaurants, retail
stores, and other amenities would flourish amidst a garden of casino resorts.
The middle class would return to the revitalized neighborhoods of Atlantic
City and witness a millennium of civic tranquility. This didn't happen.
If anything, casino resorts have further rent the urban fabric of Atlantic
City. Pacific Avenue, which once boasted a resilient, if not thriving,
line of restaurants and businesses, is now dominated by casino resorts
that have in most cases swallowed up all the land around them. A commercial
and residential area at the base of the Atlantic City Expressway was been
razed for a "corridor project" that connects the resorts of
the boardwalk with the convention center and train station. The spectacle
of casinos consuming the very businesses that they were supposed to revive
is evidence of the suburbanization of Atlantic City-to "save" the city and make it a better host to casino resorts, it will eventually
be rebuilt as a series of resorts with a few support businesses nearby,
as near a facsimile of the Las Vegas Strip as can be imagined. Only in
Atlantic City, builders will not be working from barren desert, but from
the remains of a once-booming seaside community.
Critics who observe
substandard housing or urban blight remaining in the city of Atlantic
City and conclude that the "Atlantic City Experiment" has been
a failure should consider that the city itself is only a smaller part
of a larger metro region extending beyond Atlantic County. Like Las Vegas
and indeed most of the nation, much of the growth in Atlantic City has
been in its "suburbs" (it is a bit awkward to speak of a city
as small as Atlantic City as having suburbs). So, when looking at the
larger regional picture, casino resorts in Atlantic City have been extremely
succesful at creating jobs, enhancing state revenue, and promoting development--precisely
the things that supporters of legaliation promied in the 1976 campaign.
Because of the suburbanization
they have sparked, Atlantic City casino resorts are simultaneously trumpeted
as having ushered in two decades of soaring revenues, booming development,
and rising employment and criticized for failing to completely transform
the city of Atlantic City. When compared to the impact of casino resorts
in Las Vegas, this should be no surprise; the ripples of development caused
by the casino resorts have not redeveloped the "city," though
they have promoted suburban growth in its environs. Downtown Las Vegas,
if anything, is worse off after a half-century of the Strip's ascendency
as a premier destination resort, and the city of Las Vegas faces many
of the same problems as any large urban area. Viewed within their traditonally
suburban framework, the impact of casino resorts in Atlantic City easy
to understand, as the casino resort could not forsake its suburban genesis.
Thus, the mixed success of casino resorts in redeveloping Atlantic City.
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Books
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