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Atlantic City can’t survive without its gaming economy, which is slowing moving to more metropolitan U.S. cities and overseas. It’s unlikely another industry will be able to fill its void.
As Beach Boys music blared from casino speakers and leathery tourists ambled along the boardwalk, vendor Mohammad Haroon sized up the prospects of New Jersey’s gambling hub as its casinos begin folding.
Atlantic City, he said, doesn’t stand a chance.
About a quarter of the casino jobs that propped up the city for more than three decades are on the line as one gambling house closed in January, two more plan to in the next two months and a fourth — the $2.4 billion Revel that promised to transform the town from a bastion of blue-haired slots addicts into a destination for the glitterati — is seeking a buyer in bankruptcy.
“We’re going to go back to what it was like in 1976 before there were any casinos,” Haroon, 73, said as he helped the occasional customer at his open-air beachfront shop. “This was a ghost town. Nobody was here. The casinos came; then the people came. We made a lot of money in the high times. But no one’s coming anymore.”
Once the East Coast’s gambling hub, Atlantic City has suffered as casinos opened in neighboring states including Pennsylvania and New York after they legalized gambling or expanded betting to increase tax revenue. Even as Caesars Entertainment Corp. plans to close its money-losing Showboat casino in New Jersey, it’s opening the Horseshoe in Baltimore next month.
The city’s 11 gambling houses account for almost half its jobs: 5,883 positions in a workforce of 13,500. The Atlantic Club closed in January, putting 1,600 people out of work. The shuttering of Caesars’ Showboat on Aug. 31 will wipe out 2,133 jobs. Trump Plaza Hotel & Casino said it plans to close Sept. 16, taking away another 1,009. Revel employs 3,106 people.
About one-fifth of the 30,000 people registered as casino workers with the state Division of Gaming Enforcement live in Atlantic City, the most in a single zip code. Thousands more live in the suburbs such as Egg Harbor Township, Galloway and Pleasantville.
Atlantic City’s jobless rate stood at 14.9 percent in May, more than double the statewide figure of 6.8 percent, according to state Labor Department figures. The number of city residents deemed in the workforce and unemployed was 2,400.
Based on the fifth of casino jobs held by residents, additional cuts would swell the number of unemployed in the city by about 1,500, or two-thirds.
“It’s a domino effect right now: one casino after another,” city resident Ilene Hernandez, 26, who earns $10 an hour as a cashier in a Showboat gift shop, said as she sat on a milk crate during a cigarette break. “It’s going to mean more crime and less tourists. Once their unemployment runs out, how are people going to feed their families?”
Hernandez said this is her last week at Showboat, after which she’s set to transfer to Bally’s. She said Caesars has encouraged employees to apply for openings at its newer properties in Maryland and Pennsylvania.
Caesars’ $442 million Horseshoe, scheduled to open Aug. 26 near Baltimore’s Inner Harbor, will feature 122,000 square feet of casino space and will have 2,500 video lottery terminals, 100 table games and a 25-seat World Series of Poker-branded card room, according to the company’s website.
MGM Resorts International, the largest owner of casinos on the Las Vegas Strip, was picked by Maryland regulators in December to build a $925 million resort south of Washington.
Caesars is also vying with Genting Bhd. for one of four casino licenses in New York, including at least one property in the Catskill Mountains-Orange County area, parts of which are 50 miles (80 kilometers) from New York City.
Caesars is always looking for new markets where it can generate more revenue and attract customers, said Gary Thompson, a spokesman for the Las Vegas-based company.
Atlantic City’s casino business has suffered from the recession, competition from other markets, a lack of non- gambling attractions and real-estate taxes that cost more on its four properties there than on all its others combined.
Reducing casino capacity will lead to a healthier industry in Atlantic City, Thompson said. “It’s a tough market,” he said. “This will help at least stabilize it.”
Mayor Don Guardian, who’s sought to turn around Atlantic City’s slump by championing business conventions, the arts and gay tourists, didn’t return telephone calls seeking comment on the city’s travails.
Atlantic City was a decaying resort until New Jersey legalized casino gambling in 1976 and limited it to that location. The first casino, Resorts International, opened in 1978.
Revenue rose steadily, reaching a peak of $5.22 billion in 2006. It’s dropped for seven years, falling to $2.86 billion in 2013.
“Unfortunately, New Jersey chose to cluster all of its casinos,” said David Fiorenza, a professor at the Villanova School of Business who’s studied gambling. “This is going to be a textbook study of urban economics in terms of where did they go wrong and how do you fix it?”
Governor Chris Christie announced a five-year turnaround plan in 2010 that included a marketing push to increase non- gambling tourism. The state in November also began letting casinos offer online betting. Revenue hasn’t met forecasts.
This month, Christie, a second-term Republican, and Senate President Stephen Sweeney, the legislature’s top Democrat, said they’ve become more willing to entertain discussions on opening a casino in northern New Jersey.
Fading casino fortunes mean fewer tourists, and those who come have less money, said Haroon, the vendor. He estimated that business at his open-air shop, which sells everything from rolling papers to toothpaste, has dropped 25 percent in recent years.
John Dyitt, 50, started training to work as a doorman four months before the Trump Plaza opened. Thirty years later, he sports a pin advertising his tenure in the job. In that time, he’s raised four children into adulthood and another is getting close. The casinos brought thousands of decent-paying jobs with benefits, he said.
“I managed to put my children through school and own two homes,” Dyitt said between helping guests arriving on a recent Tuesday afternoon. “I was a teenager when I started. Now I’m a grandfather.”
Employees were notified July 14 that the company plans to close Trump Plaza as soon as Sept. 16, according to a company statement. That would leave the Atlantic City-based company with one property in the market, the Trump Taj Mahal.
Senator Jim Whelan, a Democrat who lives in Atlantic City and was mayor from 1990-2001, said the job losses are “absolutely scary.”
“We’ll survive — as long as there’s an ocean, a beach and a boardwalk there will be tourists,” he said in a telephone interview. “We put all of our eggs in one basket for better or for worse. Unfortunately, that’s now coming back to be a major problem for us.”
With assistance from Christopher Palmeri in Los Angeles.
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