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Op-Ed: The rise and fall of Atlantic City

By Simon Crompton     Sep 9, 2014 in Business
As of today, Sept. 8th, Atlantic City has seen the closing of two casinos in as many weeks. On Sept. 16th, Trump Plaza will follow suit. By the end of the year, the gambling hotspot will have lost a total of five gaming houses.
Some analysts expect the city to lose four more by 2017
News of further closings doesn´t seem prepared to slow down, with the Trump Taj Mahal announcing plans to file for bankruptcy as recently as Friday. With thousands of jobs disappearing almost faster than the news can come out, the situation in Atlantic Citty is growing more dire by the day.
With closings left and right, it’s hard to imagine that just eight years ago, the city would have balked at suggestions that its gambling empire would ever be in shambles. Much of this denial would surely have been political: No public officials seem prepared to concede storms are on the horizon, even when the clouds have already darkened the sky. But largely, it would have been lack of foresight, and overconfidence assuming the guise of arrogance.
No bank is too big to fail, and no industry can carry sufficient momentum to be impervious to deceleration. Although online gambling is booming, as evidenced by sites like this Finnish Casino portal.
The city posted $5.2 billion of casino revenue in 2006, a high point the city hadn’t seen in the decades it made gambling legal. Since then, it hasn’t seen a slow but steady rise in revenues, or even a leveling out. Rather, it has seen a steep, year-by-year decline that has proven resistant to countermeasures and devastating to the local economy.
Up until 2006, however, Atlantic City had seen nothing but advances in gambling profits. This was undoubtedly the font from which developers drew their confidence to take risks and jump into the market. It is just as undoubtedly the source of Chris Christie’s brazen backing of the Revel project, the $2.4 billion-dollar enterprise that he drove to completion in 2012.
Of course, Governor Christie had the go-ahead of Wall Street analysts, most of whom were bullish on the project. But it is hard to imagine how he could have brought himself to ignore the by-then established downturn in the casino market and the established tendency of Wall Street to be bullish where it shouldn’t be.
Politicians are generally known neither for their critical thinking capacity nor their education on economic issues fundamental to their office. And to be certain, the Atlantic City crisis would have come to pass with or without Christie’s attempt to rev its economy. The lack of proper planning, however, is a striking reminder of just how dark the situation is for Atlantic City.
It’s not like Christie acted in a intellectual vacuum: Plenty of experts not affiliated with Wall Street warned him that the climate was not optimal for casinos in 2012, and that spending billions of dollars on one was, in particular, a poor idea at best.
The fact that he gave the go-ahead anyway highlights the government’s often striking dearth of sensitivity to, and concern for, the well-being of its individual constituents.
Amongst the many things that those $2.4 billion could have been better spent on are vocational education programs in anticipation of casino closings that, by 2012, seemed imminent; support programs for the then- and soon-to-be unemployed; and investments in the city’s infrastructure, public beaches and vacation attractions, which would help draw tourists to the area even in the absence of slot machines and casino hotels.
Those in charge are now realizing the need for such measures, after it has become clear that hope and good intentions are not enough to save a sinking ship. But given the timing and the lack of funds, this is probably too little, too late. The city’s several thousand ex-casino workers will either have to settle for less-than-fulfilling employment options, or travel to neighboring states with better gaming industries to find jobs where their skills will be relevant.
Either way, there seems to be little hope either for those in Atlantic City who are, or will be, looking for work, and for the city itself, which will have to struggle both to attract tourists and retain a significant portion of its permanent population for the long run.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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