A Reborn Boardwalk Empire
October 23, 2018
Timothy Schuster, CPA
A Brief History of Atlantic City:
Before the time of air and car travel, Atlantic City started as a resort town for middle class Americans with the idea that they would come and show off that they had made it in this world. Millions flocked to the city during the summer time to get away to the place once dubbed “Disneyland a generation before there was a Disneyland.” In fact, during the 1920s, Atlantic City inspired the game Monopoly and began to host the “Miss America Pageant.” The city always has gone through ebbs and flows throughout its history; and it’s a city that many of us hold in a special place in our hearts.
From the 1950s – 1970s the town went through some of its hardest times. Atlantic City needed a miracle, and with Las Vegas really starting to roll in the 1970s New Jersey officials rushed to legalize gambling in the Garden State. One by one, casinos started to open up and the city started to see an increase in tourism.
During the 1990s, Atlantic City became one of the top destinations in the United States again. During their tenure, the casinos have been responsible for more than 80% of the city’s property taxes, and have paid more than $5.5 billion in tax and gaming revenue to the state and have created over 40,000 jobs. But Atlantic City would see a few more hiccups in the coming decades. Casinos started opening up in Connecticut and Pennsylvania. During the late 2000s, the financial collapse hit the city hard. In fact, in 2010, the city was doing so poorly that the Christie administration took over for the local government.
All seemed bleak for the once bustling tourist destination, as Atlantic City was hit with a cascading waterfall of bad luck. Superstorm Sandy caused significant damage to a number of properties and the boardwalk in 2012. Most people in New Jersey remember the shuttering of four casinos during 2014, with another closing in 2016. The city seemed to be in a downward spiral without a hope for revival.
A Gleam of Hope:
A ray of hope has returned to our empire on the boardwalk. Earlier this year, the Hard Rock Hotel & Casino opened in in what was the Taj Mahal, then the Ocean Resort Casino in what had been the Revel Casino Hotel. This recreated 6,000 of the 11,000 jobs that were lost during 2014. An article posted by NJ.com in August 2018 noted that revenues were up from prior year and the new casinos contributed to around a 12% increase in revenue. In fact, Hard rock will have the second largest performing venue in the city next to the Boardwalk Hall, with a goal of offering entertainment at least 200 days out of the year -- all aimed at offering more diverse options for patrons.
An additional important milestone was the legalization of sports betting. At the beginning of 2018, the U.S. Supreme Court overturned a federal ban on sports betting outside of Nevada. Currently, New Jersey has sportsbooks in Atlantic City and at Monmouth Park and the Meadowlands. Many of the casinos in Atlantic City host sports books, and in the first month of operations, saw a massive spike in customers traveling down to place a wager -- and continue to do so.
Further, in addition to the attractions of casinos, entertainment and nightlife, Atlantic City has become a destination for ‘foodies.’ In fact, Harrah’s Resort recently announced they are turning their in-house steakhouse over to Gordon Ramsay, who now has two restaurants in the city.
And a further note from the author: If you have not had a chance to visit Atlantic City in recent months, I highly recommend doing so. I returned to the city multiple times over this past summer, and it was a pleasure to do so. I remember the summer of 2014 very vividly, and it was bleak to see the once bustling city start to go dark. Now, however, you can feel the energy back in the town. The new casinos are full of life and a welcome addition to the family of Atlantic City casinos and resorts. All seems promising to the town that was at one point the center of the action, and it’s a wonderful experience to be a part of a new renaissance in the city. Based upon the history of Atlantic City, my money will always be on the town; our reborn boardwalk empire.