Atlantic City: Struggle for Survival

33 years ago Jean Gallagher thought she was playing it safe when she gave up a career in nursing 33 years ago to become a buffet beverage server at the brand new Tropicana Casino and Resort in Atlantic City. But today, Gallagher, 62, has no remorse, even as she watches the city where she grew up struggle for survival. Her last shift for a few weeks, and maybe forever, was Sunday. She knows the worst is yet to come as more friends lose their jobs and, in some cases, their homes.

Four of the city’s 12 casinos have shut down this year. A fifth, the Taj, is scheduled for closure Dec. 12 unless its New York-based billionaire debt-holder, Carl Icahn, can reach a cost-cutting agreement with the union representing about a third of its 3,000 workers. Some 8,000 casino workers are already out of work. Others, like Gallagher, have seen their hours drastically cut by still-open casinos that have been in a struggle for survival as gaming revenues have dropped in half from their 2006 peak of $5.2 billion.

inner101122014Unemployment has reached 11% — almost twice the national average of 5.7% — and hasn’t peaked yet. Since Sept. 2, the most lavish casino of them all — the bankrupt, $2.4 billion Revel — has stood shuttered on a windswept, empty stretch of Atlantic City’s iconic boardwalk. Talks of reviving the Brookfield bid appear to be going nowhere.

“The competition killed us,” says Gallagher, pointing to more than 40 casinos that have opened in the neighboring states of Pennsylvania, New York, Delaware and Maryland in less than a decade, and there are plans for more.

The unions receive blame during this struggle for survival, notwithstanding the fact casino workers make an average of just $12 an hour, and the hedge funds that many say focused too much on profits, as well as state and local politicians who have raked in billions since Atlantic City residents voted in the 1970s to become a gaming destination, but spent astonishingly little of it on a city that dreadfully needs it.

State governor Chris Christie has formed summits intended for coming up with designs for uplifting Atlantic City. A plan is in the works that could roll back taxes and stimulate new jobs. There’s also talk of selecting an emergency manager to take control of the city’s struggle for survival.

“Atlantic City has always been happy having just one road come into town, whether it was gaming or, before that, conventions or, before that, alcohol during the Prohibition era or, before that, when it was just a big hotel for tourists,” says Mayor Don Guardian, widely seen as the best hope this city has seen in decades. “We’ve got to start seeing ourselves as a 40-lane highway.” The city isn’t so much dying as rightsizing, locals emphasize.

inner201122014“We’re still a $2.8 billion industry,” insists Bob McDevitt, a former casino server and bartender who has headed Unite Here Local 54 since 1996, the union representing about a third of the city’s casino workers.
“We’re still getting 25 million visitors a year here — almost the population of Canada.”

But even esteemed Moody’s Investors Service cut its outlook for the U.S. gaming industry from stable to negative last June, citing flat or falling revenues (except in Nevada), oversupply and high costs. It warned that “U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve.”

Stockton College economist Oliver Cooke has written about four possible scenarios for the city in the short term, which includes the loss of 6,328 to 14,258 jobs and $158 million to $376 million in revenues. Today, he estimates six or seven casinos will survive and just 18,000 to 20,000 jobs, a far cry from the peak of almost 50,000 in the 1990s.

But the larger, much needed improvement is going to be a trying trek and an even bigger urban renewal experiment than the city undertook back in the 1970s, when tourists had tired of the bustle of the boardwalk and residents voted in favor of allowing gaming to boost Atlantic City’s struggle for survival towards the light at the end of the tunnel.

Laura Barton

Laura Barton is a self-declared "adventurer". Highly energetic and unpredictable, you will never find her without something to read on her hands. She loves casinos, after all it's in her blood: her father was a Las Vegas mogul and a former owner of some of the largest casino entertainment chains in the US. Loves rock climbing, surfing and playing drums.