The city ranks near the bottom of virtually every social and economic
indicator and now faces a threat to its national relevance. By Kevin G Hall
Sakia Hall lost her $9-an-hour overnight housekeeping job at the Revel hotel and casino weeks ago, but she still cries about it. The single mother of a 12-year-old who also cares for a grown cousin is one of about 8,000 workers laid off here this year.
Forget about another casino job. Four casinos have closed this year in this New Jersey beach town and another may not be far behind. Hall, 33, was “working poor.” Now she’s just flat-out desperate and poor in a city whose 12% jobless rate was about twice the US national average even before the mass layoffs.
“It’s already hard if you are working for $9 an hour to pay $1,150 rent, and electric bills and stuff like that,” said Hall, who works two and sometimes three jobs to survive. “After six months, if you haven’t found a job, you’re out of luck, you’re homeless. A lot of people’s parents is losing their jobs.”
Hall is a face behind the implosion of this famed gambling city, and the plight of thousands like her offers a cautionary tale for states across the nation debating casino gaming or having recently authorised it.
Maryland, Pennsylvania, West Virginia, New York, Ohio and Massachusetts have all added or are adding casinos, even as iconic Atlantic City casinos shrank toward this year’s wave of bankruptcies.
Atlantic City’s problems matter because its history is woven into the national fabric.
It was known as America’s Playground in the 1930s. The Miss America Pageant began there in 1940. The popular board game Monopoly, originally a tool to teach economics, is set in Atlantic City with its famous street names such as Atlantic Avenue.
More recently, the hit HBO show Boardwalk Empire, in its fifth and final season, depicts the grit of the storied New Jersey shore community, through the tale of a prohibition-era, pre-casino mob boss.
Casinos opened in Atlantic City in 1977 to predictions of coming wealth and jobs. Yet the city ranks near the bottom of virtually every social and economic indicator and now faces a threat to its national relevance.
“When you bet the whole farm on gambling ... it’s not an industry that grows the economy. It’s an industry that sucks money out of the economy,” said Paul Davies, a senior fellow for the New York-based Institute for Family Values, a nongovernment organisation that opposes closing state budget shortfalls with gambling revenue. “It’s sort of like a roach motel — takes your money and sends you on your way.”
Thirty-seven years after the inception of casino gambling, Atlantic City has become synonymous with economic and political rot. “Casino living was easy. They paid the taxes, they created the jobs. . . . What else does a guy want?” Mayor Don Guardian said during an interview atop City Hall. “We fell asleep. We stopped marketing ourselves. . . . If our brand got burned around the edges, we need to polish it. We got rusty.”
That’s frank talk from a man who just took office in January, the month the casino collapse began.
“When I came in, I talked about being here to transition the city, not knowing that any casinos were going to close — suspecting that we might lose either Trump Plaza or Atlantic Club in 2015 or 2016,” he said. “Certainly not this year, and certainly not the other” casinos.
An estimated 8,000 people working in Atlantic City have lost their jobs at the four casinos that closed: the Atlantic Club, the Showboat, Revel and recently the Trump Plaza Hotel & Casino. To make matters worse, owners of the Trump Taj Mahal, who also chose the Trump Plaza, have said they may close the Taj in November.
“It’s just going to be more grim. I don’t see any way out of this situation,” said Shohini Chowdury, an economist with Moody’s Analytics, who expects the city’s municipal bonds, already considered to be high-risk junk bonds by several ratings agencies, to be further downgraded. “It’s just really bad.”
One symbol of rot is the stark contrast of severe poverty within blocks of the lavish hotels with casinos. Rundown homes in drug-plagued neighbourhoods are a stone’s throw from the $2.1bn glass-and-glitz Revel, which opened in April 2012 and closed early this month.
“Of all the places that I’ve travelled in the world, and casinos, nothing has ever been like Revel, it was the biggest heartbreak of my life,” said Jeffrey Ortiz, who, accompanied by his wife, Philomena, walked the boardwalk at night in a spiffy powder-blue suit and shiny white shoes that recall a past era. “I’ve never seen a hotel like that, ever.”
Ortiz has come to Atlantic City to gamble for years, fell in love with Revel and like many seemed to accept the nearby blight as just part of the scenery.
“In Atlantic City, there will always be this side and the other side of Pacific Avenue,” Ortiz said. “That’s inevitable. It’s a fact of life.”
It wasn’t supposed to be, though.
Casino gambling was supposed to bring jobs and prosperity to both sides of Pacific Avenue. But on the “other side” of the street, poor residents, mostly African-American, stare nightly at the sparkle and opulence of lit-up casinos. To many of them, the wave of casino closings brings to mind another storied American city in ruin.
“It looks like it’s turning into the next Detroit,” said Brandon Charleston, 34, slumped on wooden steps that led to the upper floor of a rundown two-storey building in the shadows of the Revel and the Trump Taj Mahal. “That’s what losing casinos in Atlantic City is. It’s basically bankrupted our city.” — MCT