EDITOR'S LETTER: Urban renewal
It was with sadness that I read about the recent passing of Joel Sterns, a founding member of Trenton, N.J.-based Sterns & Weinroth and a long-time advocate of New Jersey casino gaming. For those of you unfamiliar with Sterns, he played a key role in drafting the state’s Casino Control Act, which cleared the way for casino development in Atlantic City. As a lawyer for Resorts International he helped the property procure the state’s first gambling license, making it the first U.S. casino to open outside of Nevada.
I did not know Sterns personally, so I guess what I am lamenting is that another connection to the early, halcyon days of Atlantic City casino gaming is gone. I know this may be hard for some readers to believe, but there actually was a time when Atlantic City was on the cutting edge of casino development, and not the ebbing gaming backwater it appears to be today with tired properties, declining attendance and fast-fading revenues. In my mind, I see Atlantic City as I was first introduced to it in 1982 - brand new properties, packed gaming floors, a crowded boardwalk, with the excitement of being to only jurisdiction on the East Coast to have casinos.
I was a college student then, away from my parents Boston-area home for the first time to attend school in Philadelphia, and Atlantic City was something of a semi-regular excursion for my dorm mates and I - a chance to dress our best, escape the confines of campus life and spend an evening walking the boardwalk and being waited on while playing table games and slots.
So maybe you can understand why I find the current state of Atlantic City to be so tragic. In retrospect, it’s easy to see where mistakes were made, perhaps the most severe being the lack of attention paid to non-gaming infrastructure development by both the gaming industry and local and state governments. When expanded gaming came to the regional markets immediately adjacent to Atlantic City the casino industry alone was not enough to sustain the area’s tourist economy and southern New Jersey suffered.
Of course, the lingering economic recession did not help either. When I reported on Atlantic City a year ago for this magazine (the article in July 2010 Casino Journal can be accessed though the digital edition archive at www.casinojournal.com), Atlantic City casino operators had experienced a couple of months of revenue growth and thought the worst of the recession was over and the gaming market was on its way to recovery. They were wrong - casinos generated a combined $3.5 billion in 2010, a 10 percent decline from 2009 revenue of $3.9 billion, which in itself was bad year for casino revenues. All told, the past four years have seen Atlantic City casino revenues tank a jaw-dropping 30 percent, with more declines forecast for upcoming years.
Even the most optimistic of forecasters agree Atlantic City gaming is in dire straights and something needs to be done immediately to arrest the downward cycle. Give N.J. Gov. Chris Christie credit - you may not agree with his politics or bombastic style, but he succeeded in pushing through a much needed bailout package for Atlantic City. Among its highlights - a liberalization of casino regulations to foster gaming growth, clearance to develop two small boutique casinos in city limits, the creation of an Atlantic City Tourism District to oversee beautification and public safety projects and economic enticements for companies to bring large-scale family-oriented entertainment to the community. He even managed get the stalled Revel project on track again, thanks to a $261 million cash infusion that allowed the $2.8 billion property to secure a larger financing deal.
Is this deal in and of itself enough to revive Atlantic City’s fortunes? Probably not, but at least it stops the bleeding - and sometimes that’s just what’s needed to cure the patient.