30 years of casino gambling - its still a big deal - Thursday 29th of May 2008

In Massachusetts, the governor is pushing plans to build three resort-style casinos. Kentuckys governor wants a dozen casinos for his state. Pennsylvanias nascent gambling industry has opened seven slot parlors and has approval for seven more.

Throughout the country, more and more states have turned to the casino industry as an economic savior or are flirting with the idea. Except for Nevada, New Jersey was way ahead of them all, betting on casino gambling in 1978 to revitalize Atlantic City.

As the city prepares to mark Mondays 30th anniversary of the opening of the first casino, there is no disputing that the gaming industry has profoundly reshaped a resort city once decimated by poverty, crime and high unemployment.

The successes are obvious: Casinos have created more than 40,000 jobs. They have paid $7.5 billion in taxes to fund state programs benefiting senior citizens and people with disabilities. They also have fulfilled the promise of being "a unique tool of urban redevelopment" by investing $1.8 billion for economic development and new housing projects developed by a casino-funded state

agency.

"The people around here realized that you had one thing that would encourage developers to rebuild the city - and that was casino gambling, because the revenue is unbelievable. It worked. It really worked," said Ed Colanzi, a former city commissioner who was a key supporter of the 1976 state referendum that authorized casinos.

Opposition from the outset

Churches fought the casino movement in the 1970s, believing gambling was a sin and that it would never deliver on the economic promises. The Rev. Jack Johnson, a former board member of the New Jersey Council of Churches and vice chairman of the anti-gambling group Casinos No Dice, argued that casinos have sharply divided the city. He said too many residents and local businesses were forced out to make room for casino development.

"Our opposition was based on the belief that it would not turn Atlantic City around, that it would not provide the economic vitality. There was a concern that too many people were being displaced," said Johnson, now the director of the Massachusetts Council of Churches and an opponent of the governors casino plan in that state.

In one of the most controversial projects, nine homes on Horace J. Bryant Jr. Drive were demolished to make way for a $330 million roadway and tunnel that created a new route in 2001 to the Marina District casinos. The homeowners each were paid $200,000 for their property, but some filed lawsuits in an unsuccessful legal battle to stay.

Looking back on that fight, a disillusioned Gussie Ellis, 81, wondered whether it was worth having casinos redevelop the city if private homes had to be sacrificed along the way.

"It devastates you because you never get over it," said Ellis, who has since moved to another part of the city. "They could have brought something other than casinos, because its gotten to the point where there is nothing else here anymore."

Casino gambling did not quickly eliminate Atlantic Citys urban problems. Magnifying the citys slow redevelopment was the stark contrast between the glitzy gaming complexes and the adjacent slum-ridden neighborhoods. Only since the late 1990s has the city begun to evolve into the type of tourist destination and revitalized residential community envisioned by casino supporters.

"When I first came to town, everybody thought they would rip everything down for beautiful, pristine beaches and start building beautiful palaces out of that," casino owner Donald Trump recalled of the 1980s. "The original concept was that everything would come off the island. Housing would come off the whole island and there would be beautiful, pristine beaches for the casino hotels. That never did happen."

Former Gov. Brendan Byrne, who cut the ceremonial ribbon during the grand opening of Resorts International Hotel Casino on May 26, 1978, agreed with Trump that parts of the city remain scarred by blight 30 years later. Byrne lamented that, as governor, he didnt prod city officials into accepting a regional approach for planning, zoning and transportation to avoid what is now a parochial effort to handle those issues.

"Back then, they would have done anything I would have asked them to do to get those casinos," Byrne said.

To the contrary, Colanzi complained that too much state interference hindered the citys growth and sapped some of the financial benefits created by casinos.

"Too often, they helped themselves more than the community," Colanzi said of state government. "They didnt do a lot of things that benefited Atlantic City."

Despite any political squabbles, Byrne maintains that the successes of casino gambling far outweigh any failures. As a sign of his confidence in the gaming industry, he wants the state to expand gambling by approving sports betting for the casinos, an issue now bogged down by political and legal debate.

"I think we may have to take another look at whether we should let sports betting in the casinos," Byrne said. "I think that sports betting is so prevalent that we might as well legalize it. New Jersey should use it as a source of tax revenue."

More change needed

Sports betting is just one of several critical contemporary issues confronting the casinos. When Resorts opened 30 years ago, Atlantic City joined Las Vegas as the only places in the country to have casino gambling.

On the East Coast alone, New Jersey is now surrounded by slot parlors in Pennsylvania, New York and Delaware. Two gigantic American Indian casinos dominate Connecticuts gaming market. Extra competition from surrounding states was the chief reason Atlantic Citys gaming revenue fell 5.7 percent to $4.9 billion in 2007, the first such decline in the resorts casino history.

The global credit crisis and faltering economy have added to the citys woes. Funding for major gaming projects has all but dried up, delaying plans for a $1.5 billion casino by Pinnacle Entertainment Inc. and a $1 billion expansion of the Atlantic City Hilton Casino Resort.

Changing lifestyles are also affecting the casinos. Worried about the dangers of secondhand smoke, City Council voted last month for a total casino smoking ban that will begin Oct. 15. Currently, smoking is allowed on only 25 percent of the casino floor under a year-old city law that gaming executives have blamed for scaring customers away. The complete smoking ban will give casinos one more challenge in an intensely competitive industry.

Interestingly, the next new casino had planned to be totally smoke-free well before City Council approved the ban. Revel Entertainment Group is building a $2 billion megaresort on oceanfront land next to the Showboat Casino Hotel. Known only as "Revel," the casino is scheduled to open in 2010, giving the city its first brand new gaming hall since Borgata Hotel Casino & Spa opened in 2003.

Revel will build at least one 1,900-room hotel tower and is thinking of adding a second of the same size. Three new towers totaling 2,500 rooms are opening this year at Harrahs, Borgata and Trump Taj Mahal Casino Resort, boosting the citys total hotel inventory by 17 percent to 17,000 rooms.

Reviving a city

Advertisements in support of the 1976 casino referendum noted how 8,000 hotel rooms had closed in Atlantic City in the 1960s and 70s. At that time, the Boardwalks once-glamorous hotels had lost their luster, family-run businesses that flourished decades earlier were crumbling and entire neighborhoods had disintegrated.

"The city was in terrible shape," Colanzi said. "One of the reasons was, it was just as easy and cheap for tourists to fly to the Caribbean or Florida as it was to drive here. The hotel industry was failing because they didnt compensate or do something different to entice people to come here.

"We didnt keep up with the times," he continued. "We needed help, and we got that help from casinos."

The "help" theme was a central part of the gambling platform. "Help yourself. Help Atlantic City. Help New Jersey," declared one pro-casino brochure while promising a series of economic benefits.

"We all saw what Atlantic City looked like in the 1960s and all the problems that were here. Certainly, gaming has brought jobs and revenue, so its had a very positive effect," said Linda M. Kassekert, chair of the Casino Control Commission, the state agency that regulates the gaming industry.

Trump argued that the city would have prospered even more if the airport had not lagged and the new convention center had been built on the Boardwalk next to the casinos instead of five blocks away at the foot of the Atlantic City Expressway.

"You can never be totally satisfied, but certainly great progress has been made in the last 30 years," Trump said. "Im just sorry that the convention center wasnt built in a different location and the airport was never fully developed."

To ensure the casinos would help redevelop the city and other parts of New Jersey, the state created the Casino Reinvestment Development Authority in 1984. Casinos are required to reinvest 1.25 percent of their gaming revenue for economic development and housing projects controlled by the authority. So far, the authority has funded $1.8 billion worth of projects statewide, including $1.5 billion in Atlantic City, where more than 1,400 new housing units have been built.

In the citys Northeast Inlet, more than $300 million in casino investment allowed the development authority to transform a blighted area into a vibrant neighborhood of 620 new housing units, parks and tourist attractions.

New shopping centers such as The Pier at Caesars on the Boardwalk and The Walk at the expressway entrance have also helped the city expand an economy once based almost entirely on casinos. Emulating Las Vegas, Atlantic City has begun adding high-end retail shops, restaurants and nightclubs to offer tourists more to do than just gamble.

Revels casino will include an array of nongaming attractions. A massive new casino proposed by MGM Mirage Inc. and another planned by a development group headed by Cape May hotel owner Curtis Bashaw would also include upscale retail, dining and entertainment.

However, Johnson, the casino opponent, believes Atlantic City would have been revitalized even if casinos had not been approved because developers would have snapped up its oceanfront land for other projects.

"I would argue that surely it would have been redeveloped because of Jersey sprawl," he said. "I dont know what the city would have looked like, but shorefront real estate in the last decade has been very valuable. My sense is that a lot of that would have been developed if there was gambling or not."

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