Saturday, March 28, 2015

peak casinos


newyorker |  In the summer of 2010, New Jersey Governor Chris Christie travelled by helicopter to Atlantic City for what the local media described as a historic press conference. The news out of the city had been growing steadily worse, and by the time of Christie’s appearance it was clear that, nearly four decades after it had legalized gambling in an attempt to avoid economic ruin, Atlantic City was back where it had started. Standing in front of Boardwalk Hall, next to the mayor and members of the city council, Christie declared, “Atlantic City is dying.” The city, once known as the World’s Playground, had become unclean and unsafe. The number of visitors had fallen, and casino revenues were plummeting. Christie then announced a plan to return Atlantic City to its rightful place as the East Coast’s premier entertainment destination. There would be a sparkling new tourist district, with more conventions, restaurants, retail outlets, and non-gambling attractions. Also in development were bold new marketing plans and nonstop air routes to deliver fresh gamblers. Atlantic City, the Governor promised, would become “Las Vegas East.”

Four years later, Christie’s plan has failed. Four of Atlantic City’s twelve casinos have gone out of business this year, including Revel, an estimated $2.3-billion jewel that opened just two years ago; another, the Trump Taj Mahal, has announced that it could close within weeks. An estimated eight thousand jobs have already been lost, and thousands more seem likely to follow. Since Christie’s 2010 press conference, the assessed value of all the property in the city has declined by nearly half.

While it would be easy to conclude that Atlantic City’s demise is the predictable result of decades of well-documented greed, corruption, and incompetent leadership, the city is in fact one of the first casualties of a nationwide casino arms race. Eager for new jobs and new revenues that don’t require raising taxes, states from coast to coast have turned to gambling: in 1978, only Nevada and New Jersey had commercial casinos; today, twenty-four states do. Atlantic City once had the densely populated Northeast all to itself, but now nearly every state in the region is home to casinos. And with both New York and Massachusetts poised to open massive new gambling resorts, the competition for the fixed number of gamblers there will only get tougher. “It’s a war,” Father Richard McGowan, a professor of management at Boston College who studies the gambling industry, said. “It’s remarkable to me how the states are fighting each other for gambling revenue.”