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Jurisdiction Summary:
Atlantic City, New Jersey


Author: Dave Schwartz, Center for Gaming Research @UNLV
email: dgs@unlv.nevada.edu

This page should be used as a quick summary of the history and current issues involving the casino industry in Atlantic City, NJ. It is from an academic angle, but many of the links are of interest to those visiting Atlantic City as well. Some of the "History" has been excerpted from Suburban Xanadu: The Casino Resort on the Las Vegas Strip and Beyond.
History and Summary
Selected Bibliography
Internet Resources
History and Summary


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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Note: This summary is the intellectual property of the author and the University of Nevada, Las Vegas. Do not use or reproduce without proper citation and permission.
Selected bibliography


Books

Ader, Jason. Atlantic City high-stakes renaissance. New York, N.Y. : Bear Stearns, 1996.

Alcamo, John. Atlantic City: Behind the Tables. Grand Rapids, MI: Gollehon, 1991.

Barrett, Wayne. Trump the deals and the downfall. New York, NY: HarperCollins Publishers, 1992.

Demaris, Ovid. How greed, corruption, and the Mafia turned Atlantic City into--the boardwalk jungle. Toronto; New York: Bantam Books, 1986.

Dombrink, John and William N. Thompson. The Last Resort: Success and Failure in Campaigns for Casinos. Reno: University of Nevada Press, 1990.

Eadington, William R. ed. Gambling and Society: Interdisciplinary Studies on the Subject of Gambling. Springfield, IL: Thomas, 1976.

Eadington, William R. and Judy A. Cornelius, eds. Gambling and Public Policy: International Perspectives. Reno: Institute for the Study of Gambling and Commercial Gaming, 1991.

Goodman, Robert. The Luck Business: The Devastating Consequences and Broken Promises of America's Gambling Explosion. New York: The Free Press, 1995.

Hsu, Cathy H. C. ed. Legalized Casino Gaming in the United States: The Economic and Social Impact. New York: The Hapworth Hospitality Press, 1999.

Mahon, Gigi. The company that bought the boardwalk : a reporter's story of Resorts International. New York : Random House, 1980.

Morrison, Robert S. High stakes to high risk : the strange story of Resorts International and the Taj Mahal. Ashtabula, OH: Lake Erie Press, 1994.

Pollock, Michael. Hostage to fortune: Atlantic City and casino gambling. Princeton, N.J. : Center for Analysis of Public Issues, 1987.

Sternlieb, George and James W. Hughes. The Atlantic City gamble. Cambridge, MA: Harvard University Press, 1983

Teski, Marea et al. A City Revitalized: the elderly lose at monopoly. Lanham, MD : University Press of America, 1983.

Tuccille, Jerome. Trump :the saga of America's masterbuilder. New York: Primus, 1986.

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Search UNLV's Online Catalog for these books or others.
Selected Internet Resources


Sites with general information

Atlantic City Travel Guide

Atlantic City Insider's Guide

Atlantic City Online

AtlanticCity.com

MetroJersey's Atlantic City Links

The Press of Atlantic City

USA Citylink's Atlantic City page

Atlantic City casinos

Borgata

Atlantic City Hilton

Bally's Atlantic City

Caesars Atlantic City

Harrah's Atlantic City

Resorts Atlantic City

Sands

Showboat

Tropicana

Trump Marina

Trump Plaza

Trump Taj Mahal

Non-profit organizations

Atlantic City Public Library

Greater Atlantic City Hotel-Motel Association

Atlantic City Special Improvement District

Government information resources

Atlantic County Online

New Jersey Casino Control Commission

New Jersey Casino Revenues

New Jersey Division of Gaming Enforcement

New Jersey Casino Control Act

"Casino Gambling in New Jersey"
Report to the National Gaming Impact Study Commission, January 1998

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About the Author


Dave Schwartz
is the Director of the Center for Gaming Research as well as a frequent commentator on gaming history and current issues for a variety of local and national media sources, and a popular author and speaker. He is a proud native of Atlantic City, NJ.

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Subject Guides

Atlantic City, NJ--jurisdiction summary | Canada--jurisdiction summary
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