By Andrew Kim
How do you regild a city that’s lost its luster? Last month, the New Jersey Governor’s Advisory Commission on Gaming, Sports, and Entertainment released a report attempting to answer that question for Atlantic City. The report reveals some ugly truths, but it also evinces careful optimism about the city’s future (coincidentally, the Bruce Springsteen classic, Atlantic City, does the same):
- Gonna be a rumble on the promenade. Not literally, of course, but an increasing number of casinos are fighting for gamblers on the promenade that is the Mid-Atlantic. In 2006, Atlantic City was the only player in the game; its casinos took in $4.9 billion in revenue. Seven years later, that number dwindled to $2.9 billion. Philadelphia-area casinos are primed to take the largest share of the market, but with the emergence of new players such as Maryland Live and the Horseshoe Baltimore, it’s safe to say no city will have a monopoly like the Atlantic City of old.
- The gamblin’ commission’s hangin’ on by the skin of its teeth. New Jersey has two bodies responsible for gaming regulation: the Division of Gaming Enforcement (an arm of the Attorney General’s office) and the Casino Control Commission (a separate state agency). In 2010, the Control Commission lost much of its bite when state lawmakers embraced casino deregulation and transferred much of the Control Commission’s regulatory powers to the Division. The report goes one step further, proposing consolidation of the two bodies. If what’s past is prologue, a single regulatory body will not want for criticism.
- Now our luck may have died, and our love may be cold. The report highlights the demise of the Atlantic Club, Showboat, Revel, and Trump Plaza. (Though the Trump Taj Mahal is likely to follow, an investor may yet save the day.) The casinos that have shuttered their doors have struggled to reopen them. Revel cannot hold onto a buyer. Trump Plaza recently sold the last of its gaming machines. The report, like many others, quietly acknowledges that there is no return to the heyday of gaming; the town must “pivot away from reliance on [the] gaming industry,” focusing instead on the Atlantic of Atlantic City.
- I got debts that no honest man can pay. This line could easily be sung by many in Atlantic City. The City itself is struggling to pay its obligations; as casino revenue (and the taxes derived therefrom) continue to go down, the costs of running the City have gone up. Not surprisingly, the price of health insurance and pensions has burdened the City’s coffers. Debt servicing, however, weighs most heavily on the City—it constituted 28% of the City’s non-departmental appropriations, having grown 71% between 2006 and 2014.Another group with increasingly unmanageable debts? The casinos. As the bright lights of their (former) competitors begin to fade, the surviving casinos face an increased tax burden. The Commission, in an effort to stave off future losses, has recommended an alternative payment system for property taxes, though its report is short on the details of what this system would look like.
- Well, I’m tired of comin’ out on the losin’ end. The State of New Jersey has invested quite a bit of cash to keep Atlantic City afloat, with mixed results. It now wants to take the reins and realize a “return” on its investment. Perhaps the most striking feature of the Commission’s report is the proposal to appoint an emergency manager—an Atlantic City czar, akin to the managers of Michigan’s cities. An emergency manager will make it easier to implement reform, but local officials will undoubtedly resist the idea.
- Maybe everything that dies someday comes back. The report has an aggressive plan for revitalization. It proposes to make the entire city one giant tourism district, moving beyond the Boardwalk and the Marina. The Commission envisions the new Atlantic City as a mecca for nightlife, yachting, business development, and family-oriented entertainment, with gaming as a complement to these attractions.
The report proposes radical changes to achieve this vision. It suggests the Casino Reinvestment Development Authority should “assume responsibility for Zoning, Planning and Code Enforcement” from the municipal government. To replace the now-defunct, entertainment-focused Atlantic City Alliance, the Commission recommends the formation of a new nonprofit development company focused on long-term, structural development.
But what about the disused casinos? As the Showboat’s pending transformation from casino to college campus suggests, casinos can be repurposed. Not all casinos, however, can find new life; in such instances, the Commission proposes demolishing the bulky buildings and greenscaping the plots on which they sit. (Trump Plaza seems to be a candidate.)
The shift away from casinos does not mean a shift away from gaming. In fact, the Commission endorsed the idea of issuing gaming licenses to boutique hotels. Combined with statewide moves to promote online gaming and legalize sports betting, the boutique-hotel recommendation suggests Atlantic City is not jettisoning gaming from its identity. Rather, it is moving away from an era of monolithic resorts, a move spurred by changing times and the reality that the City is no longer the king of East Coast gaming.