Atlantic City is a small resort city on New Jersey’s Atlantic coast, with a population of around 40,000. Despite that, it’s a city that is known all around the world, primarily for one reason – gambling. Along with Las Vegas it would become the premier location for players, boasting a huge range of casinos and attracting people from far and wide.
Already blessed with beautiful beaches, the influx of casino players would see major hotels and nightclubs pitch up in the city, transforming the nightlife, and the city in general. All of this combined to make Atlantic City a must-see place for people seeking thrills.
The early days
While gambling is synonymous with Atlantic City, it wasn’t always like that. In fact, it took until the mid to late 70s before gambling was accepted in the area. In 1974, a vote went against legalising gambling, although it was close and pressure was building by big money businessmen for the decision to change.
Two years later, a new vote would see casinos allowed in New Jersey, but restricted to Atlantic City, and in America at the time the only other legal casinos were in Nevada – on the other side of the country. So, for many people Atlantic City became the go-to place to get all your casino excitement.
Over the next few years some of the biggest casinos in the city would be built, and in 1978 the first casino was officially open. Singer Steve Lawrence would throw the first dice at the Resorts Casino Hotel, and gambling in Atlantic City had begun.
Revenues begin to soar
It didn’t take long for locals and tourists to realise the potential of the city, and in 1981 revenues would top $1bn for the first time, and they would continue to rise every year for 26 years!
As the revenues, and in turn profits rose, the Casino Reinvestment Development Authority was created, with the sole purpose to use casino money to make public improvements and housing. Over the years, billions of dollars would be spent and hundreds of projects across the state would benefit.
Despite the money going around, Elsinore’s Atlantis Casino Hotel became the first one to close in 1989, after filing for bankruptcy. Other casinos manage to emerge from similar experiences, but that doesn’t stop the popularity and appeal of Atlantic City from increasing during this period.
The city had transformed to take on all types of entertainment over this period. As well as the casinos clubs, there would be big names from the music industry performing, and huge boxing bouts. ‘Iron’ Mike Tyson made several defences of his heavyweight title as sports fans would descend on the East Coast.
As mentioned, a significant reason for the major early success was the fact that nowhere else on the East Coast could offer gambling facilities, but over the years more states legalised it and so competition increased significantly.
It began in the 90s, two casinos opened in Connecticut, while Pennsylvania, New York and Delaware would all expand and grow their gaming industries. It was similar across all other areas of the country. To compound it, Vegas was in the middle of a major makeover, and it began to wrestle the number one mantle back from Atlantic City with new hotels, casinos and improvements all over Nevada.
With the competition, Atlantic City inevitably lost some customers, as people wouldn’t feel the need to travel across the country for their fun. However, it was still going strong in the mid-90s, with a whopping 50,000 employees, and revenues would still be rising through the billions.
Hard times hit Atlantic City
Although revenues would continue to rise until they hit a peak in 2007, the first signs of trouble began in the early 2000s. New Jersey was suffering economic hardship, with higher unemployment, and a surge in crime, which started to take the gloss off the city for the visitors.
Revenues would then peak at $5.2bn, but then the recession hit. The whole country would suffer, which meant casinos everywhere would suffer, particularly Atlantic City. With less disposable income, less punters would take to the casinos when travel and hotel costs were added into the mix.
As numbers were falling, it called on the casino to offer more inventive ways to attract players, especially the high rollers. They were considered essential in the tough times and the casinos would go to some lengths to entice the players. It could be as simple as free rooms, meals, and in some cases, it would be negotiating specific deals.
For Don Johnson, a high roller, that deal included a payback percentage on some of his losses, and specific rules for his blackjack games, and what a good deal that would turn out to be for him.
In 2010, he would take around $15m from three casinos in the city, all within a few weeks of each other, decimating their profits in the process and attracting worldwide attention. That included winning $1.2m in the space of three hands at the Tropicana, before ending his 12-hour gaming spree up a massive $6m. A further $5m would come from the Borgata casino, with $4m from Caesars. Not bad!
A few years later, New Jersey was hit by the devastating Hurricane Sandy, which killed 37 people. It also caused $30bn worth of damages and so had a major impact on the casino industry. Obviously, people were escaping the area and Governor Chris Christie ordered that all casinos in Atlantic City would be shut as President Obama made an emergency declaration for New Jersey.
The casinos were shut for several days, and November 2012 saw a 28% drop in revenue, which was the biggest monthly drop in 34 years. These factors meant that tourism to the city would drop year on year, and four of the city’s 11 casinos would announce closure, plans to close or bankruptcy in 2014.
What does the future hold?
At its pomp, Atlantic City would rival Vegas, for the entertainment, the nightlife and the easy way of life. However, over the last decade the two have drifted apart at a significant rate.
Sure, you can still enjoy a great range of casinos in the city, and the history and glamour that was once attached to the area means that it will always attract some gamblers. However, as the buildings get older and the competition improves it makes it harder for Atlantic City to stand out in a competitive market. Keep an eye on the blog for more articles on the history of gambling around the world.