Atlantic City
Atlantic City was an immensely popular resort destination throughout the late 1800s and early 1900s. It was easily accessible by rail, and people visited the beautiful beaches and elegant hotels along the nearly five-mile boardwalk. During the 1960s the city lost most of its tourist trade to beaches further south, mainly in Florida and the Caribbean, and the city fell into an economic slump. Casinos were seen as a way to revitalize the city and attract tourists again. The first casino, Resorts International, opened in 1978, followed by Caesars Atlantic and Bally's Park Place in 1979. By 1991 casino gambling was permitted twenty-four hours a day.
Although it has only thirteen casinos, Atlantic City is the second-largest gambling market in the country according to the AGA, with a gross revenue of $4.48 billion in 2003, up 3% from 2002. (See Table 4.2.) All Atlantic City casinos are land-based. According to the New Jersey Casino Control Commission 2003 Annual Report, as of December 31, 2003 they offered 1,370 table games, sixteen keno windows, and 42,378 slot machines. Atlantic City casinos employed 46,159 people in 2003 and paid wages of $1.1 million. They paid taxes of $358 million.
Atlantic City differs from Las Vegas in many ways. There are far fewer hotel rooms (only about 13,000) with fewer amenities. Atlantic City is considered a "day-tripper market," meaning that it attracts people mostly within driving or train distance who visit for the day (many of them from New York City and Philadelphia). Casino development has been sluggish in Atlantic City. No new casinos were built during the 1990s. The Boyd Gaming Corp. and MGM Mirage collaborated to open the city's newest casino/hotel named Borgata in July 2003 in the marina district of the city.
In Atlantic City each casino is assessed an 8% tax on its gross revenue (i.e., casino revenue after all bets are paid but before taxes and other expenses are paid). These payments go into a fund that is distributed among various programs throughout the state, primarily for physical and mental health programs for the elderly and people with disabilities. According to the New Jersey Casino Control Commission, in fiscal year 2003 (July 2002–June 2003) fund expenditures totaled $435 million and were distributed as follows:
- Physical and Mental Health Programs—90%
- Transportation Programs—5%
- Educational, Cultural, and Intellectual Development—4%
- Economic Planning, Development, and Security—1%
TABLE 4.2
| New Jersey casino industry statistics, 2002–03 | ||||
| ($ in thousands) | ||||
| Casino hotel | Gross revenue | Tax | Market share of casino win | |
| SOURCE: Adapted from "New Jersey Casino Industry Gross Revenue Statistics for the Two Years Ended December 31, 2003, and 2002," in New Jersey Casino Control Commission 2003 Annual Report, New Jersey Casino Control Commission, January 28, 2004 | ||||
| AC Hilton | 2003 | $ 308,651 | $ 24,692 | 6.9% |
| 2002 | $ 306,296 | $ 24,504 | 7.0% | |
| Bally's Atlantic City | 2003 | 677,286 | 54,183 | 15.1% |
| 2002 | 525,017 | 42,001 | 12.0% | |
| Borgata | 2003 | 266,857 | 21,349 | 5.9% |
| 2002 | – | – | n/a | |
| Caesars | 2003 | 517,760 | 41,421 | 11.6% |
| 2002 | 524,241 | 41,939 | 12.0% | |
| Claridge | 2003 | – | – | n/a |
| 2002 | 159,286 | 12,743 | 3.7% | |
| Harrah's Marina | 2003 | 451,013 | 36,081 | 10.1% |
| 2002 | 450,842 | 36,067 | 10.3% | |
| Resorts | 2003 | 232,599 | 18,608 | 5.2% |
| 2002 | 260,741 | 20,859 | 6.0% | |
| Sands | 2003 | 184,541 | 14,763 | 4.1% |
| 2002 | 207,447 | 16,596 | 4.8% | |
| Showboat | 2003 | 377,706 | 30,217 | 8.4% |
| 2002 | 368,504 | 29,480 | 8.4% | |
| Tropicana | 2003 | 372,142 | 29,771 | 8.3% |
| 2002 | 405,302 | 32,424 | 9.3% | |
| Trump Marina | 2003 | 258,934 | 20,715 | 5.8% |
| 2002 | 280,976 | 22,478 | 6.5% | |
| Trump Plaza | 2003 | 317,908 | 25,433 | 7.1% |
| 2002 | 338,655 | 27,092 | 7.8% | |
| Trump Taj Mahal | 2003 | 515,495 | 41,240 | 11.5% |
| 2002 | 532,002 | 42,560 | 12.2% | |
| Totals | 2003 | $ 4,480,892 | $ 358,473 | 100.0% |
| 2002 | $ 4,359,309 | $ 348,743 | 100.0% | |
The casinos of Atlantic City have not changed the town into a trendy tourist destination as was originally hoped. In fact, Atlantic City has the reputation of being "a slum with casinos." Industry experts point to two primary factors for this perception. First is the town's reliance on day-trippers rather than long-term vacationers. Second is the way in which casino tax revenues have been invested. The tax revenues generated by the casino industry have largely funded physical and mental health programs throughout the state rather than being invested in local infrastructure and economic development programs.
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