Just a few weeks ago Atlantic City was facing a shutdown of “non-essential” services, a state takeover that their mayor compared to a “fascist dictatorship,” and $500 million in debt on top of a $100 million budget deficit. Those problems aren’t going away, but the New Jersey legislature has brought up some fresh towels and a coupon for a free steak/lobster dinner with the purchase of three similarly priced dinners, so just about anything is possible.
While Governor Christie talked a big game about asserting state control over the city, an agreement passed by the state assembly and senate avoids that fate and gives AC a loan and five months to come up with a budget for 2017.
The deal also directs the casinos—the most successful of which had been withholding taxes they owed on the basis that they were too high for their own shrinking revenue—to pay the town $120 million a year and another $110 million over ten years. Casino revenue was down to $6.6 billion last year from $20.5 billion in 2010.
If Atlantic City fucks this up at any point over the next five years, the state’s Department of Community Affairs reserves the right to step in and assert state control, which no one really wants (except for Republicans, who see an opportunity to tweak or eliminate collective-bargaining rights of municipal employees).
“This certainly gives us some cash right now as we get excited to open the Jersey Shore for the Memorial Day weekend, and it puts the onus back on the elected officials locally to find the solutions,” Atlantic City Mayor Don Guardian said, according to the Press of Atlantic City. “And starting on Tuesday, that’s exactly what we’re going to do.”
Because legalized gambling went so well in Atlantic City, New Jersey voters will decide in November whether to legalize gambling in North Jersey, right next to New York City.
“Three to five casinos will close. The fallout of those three to five casinos will be, potentially, 23,000 job losses," said Mark Giannantonio, the CEO of Resorts Casino Hotel in Atlantic City, citing a study his casino commissioned on the impact North Jersey “megaresorts” would have on AC’s business. In 2014, four of the city’s 12 casinos closed.
"Foreclosures will double, unemployment will double. I can go on with many, many more metrics.”
Proponents for the referendum to turn North Jersey into a pulsating tentacle of misery say that the new casinos would generate $200 million for Atlantic City (the referendum says no such thing, but gambling advocates have floated this number as a token offering).
“These studies are meaningless,” Jeff Gural, the owner of Meadowlands Racetrack, a potential “megaresort” site, told the Press. "You guys are nuts. This is your best chance.”
Hear that, Atlantic City? A guy who owns a racetrack says your best chance is to relinquish your monopoly on legalized gambling in the state of New Jersey and let casinos closer to the biggest city in America take your business.
In the meantime, casino revenue was up $22.9 million in the first quarter of 2016, an increase of 3% from 2015, thanks mostly in part to the contracting of the market. Life finds a way.