Recently a well-know politician asked, “How can anybody lose money running a casino?”
Here’s how.
Atlantic City is home to eight major gambling casinos, and several smaller ones. Five years ago, there were a dozen, employing 33,000 people. Several of those remaining have suffered bankruptcy, ownership change and renaming. Some of the gambling industry’s famous names – Bally, Sahara, MGM Grand, Playboy, Hard Rock, Caesars, and Trump – have closed casinos or gone through bankruptcy reorganization or abandoned unfinished projects.
Atlantic City city built the first boardwalk in 1870 in an effort to prevent vacationers from tracking sand into hotel lobbies. By 1874, a rail link from Philadelphia was bringing 500,000 visitors a year. Rapid expansion of train service coincided with the building of massive tourist hotels.
Atlantic City embedded itself into American culture. Salt water taffy was invented there in 1883. The game Monopoly and its playing board
reflected the city’s street names. The Miss America Pageant began in September 1921 with the purpose of extending the tourist season beyond Labor Day. Atlantic City had a dubious honor in 1929, hosting a conference of organized crime figures from around the country.
The Democratic Party held its 1964 national convention in Atlantic 
City, nominating Lyndon Johnson for president. The convention’s press coverage, instead of promoting the city, instead showed its economic decline to the rest of the U.S.
To revitalize the decaying resort town, in 1977 voters approved Atlantic City gambling. The industry peaked in 2006 with revenue exceeding $5 billion. It’s now half that amount. Pennsylvania, Delaware, Maryland, Connecticut, and New York State have legalized gambling cutting into Atlantic City’s take. There is also pressure to legalize gambling in other parts of New Jersey. Internet gambling has taken its share, too. Falling revenues have caused casinos to challenge property-tax assessments, putting the city itself on verge of bankruptcy if it is forced to make sizable refunds.
New Jersey Governor Chris Christie, like all conservative politicians, a proponent of small government and local control, decided it was time for the state to take over Atlantic City’s entertainment center. In 2011, he announced the Atlantic City Tourism District. The state-run CRDA would oversee all functions of the district and make changes, including eminent domain, to bring in new businesses and attractions. It would provide a heavier police presence, as well as beautification and infrastructure improvements.
The remaining Trump facility, the Taj Mahal, is Trump in name only. The new owner, corporate predator Carl Icahn (remember TWA?), pays a royalty for use of the presumably marketable name. He is currently fighting with employees who have gone on strike, objecting to, among other things, taking away health care benefits.
No doubt we will be hearing more about the Atlantic City casino business until November 8.
Here is a New Jersey native and Chris Christie hero Bruce Springsteen’s take on Atlantic City.
Fun fact: The word “casino” by strict definition does not relate to gambling. A casino is a building or large room used for meetings, dancing, or other entertainment. (See Catalina Island.) Over time, it has come to mean a gambling establishment.
