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Possible Reasons Why Atlantic City Is Seeing A Decline Despite A Casino Growth

There was a time that Atlantic City, New Jersey was in dire and dull straits but around 20 years ago, a resurrection was taking place thanks to the process of casino gambling. While the city is starting to go uphill, this resurrection process has been slow to occur. More and more competition is showing up in the city, which makes it have an uncertain future: it can continue to grow, become idle or begin to drop. Bear in mind that most people come to Atlantic City with one thing in mind: gambling. Thus, if gambling starts to go downhill, so might the city.

The rise in the development of urban and casino construction has generated billions of dollars for the state’s economy. Not only did it generate additional tax revenue but it created additional jobs… more so than there were people living in the city. However, the casino industry has failed in its efforts to restore the area to its glory days as the world’s playground or hospitality center even with the Casino Control Act. Why is it that the casino industry has failed to turn this economy around? Here’s a look at the reasons as to why this is going on and if these things are a short term or long-term effect:

Why The Atlantic City Economy Has Failed To Respond Positively

Atlantic City has yet to gain many of the benefits that come from the casinos even though they contribute to most of the tax levy (roughly 70 percent). The casinos in Atlantic city may have 40,000 people on their payrolls but their wages, for the most part, are low and based on a study, one-third of these hotel employments have a low payment package.

The Atlantic City casinos have been able to provide the city the necessary resources for its redevelopment as well as create many moderate-income level jobs thanks to the catering of millions of visitors every year. Thanks to the casino revenues, the state has received various tax benefits. Keep in mind that the tax revenue being generated is similar to the ones found in Las Vegas. It seems that such a strong cash flow would have an economy that does well. This is not the case.

You already know that the money issue is a big problem but the other issues facing the decline are the political errors and slowdown of the economy; these are perhaps the biggest issues. After all, there have been disputes between the city of Atlantic City, Atlantic County and New Jersey regarding certain issues such as social degeneration and poor infrastructure that had drudged on until the past several years.

According to the state’s casino control act, two percent of the casino’s gross revenues were supposed to go to New Jersey for the sole purpose of redevelopment in Atlantic City. It seems that the state made a big error; it was thought that the casino and hotel investment in Atlantic City would be plenty to encourage community growth… even though the funds were supposed to be for urban expansion.

It was thought by the state that the infrastructure and housing would grow based on the casino industry growth. It is this false theory along with the economy on both the state and federal levels that have led to the slowdown in the city (everybody remembers the housing bubble that burst, which has led to the recession, many people are still facing today).

However, other cities and towns have done what they can, even spending millions of dollars, to attract new businesses and talents to their particular economies. For instance, New York State has approved six tribal casinos along slot machine gaming at eight racetracks. A move like New York State was done in the effort to offset the ballooning state deficit, which had intensified by the economic slowdown and war on terrorism fallout. Now the terrorists’ action in New York City on Sept. 11 has played a big part in the economy as well. Of course, these things serve as the idea that casino development is a good thing for the local, state and federal economy… so long as it’s done right.

In the last several months, roughly 500 casino employees have been laid off within Atlantic City; although other gaming jurisdictions are doing the same thing. All peripheral casino businesses such as hotels, shows and more are seeing a downward trend; thus, gaming revenues are also on the decline. So the question remains: Will the city be able to deal with this downtown and come back out on top or is this the beginning of the end of Atlantic City? In all honesty… time will let known what happens.

Misc.

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