Gambler’s Haven Atlantic City: A Brief History
Do you know why Atlantic City is called the playground of the nation? Two words: anything goes. There’s nothing you can’t get in this resort city, whether slot machines or drinks. Gambling and alcohol were raving in Garden State even during Prohibition. Here’s a brief history of gambling in Atlantic City.
The Early 20th Century
Compared to other states, New Jersey was known for gambling before the latter was legalized in the 1970s. It has the Freehold Raceway, the oldest racetrack in the country.
Atlantic City has the second-largest gambling industry, bringing home $3 billion annually. It was known as “The World’s Playground,” a name given to the City by Enoch L. “Nucky” Johnson, the city’s crime boss.
He assumed control of the City in the 1900s, advocating for liquor and gambling. Things went south in 1941 when authorities convicted Johnson. When he got out after ten years, he didn’t revert to politics. And this was the end of gambling in Atlantic City, i.e., till 1970.
Legalization and Beyond
By the 70s, most famous hotels and resorts in the City were out of operation. The City looked like a ghost town, with the big hotels turned into nursing homes. However, in 1970, things began to change when the referendum for the Lottery system was sparked. The City came back to life.
From 1970 to 1987, Atlantic City rebuilt its reputation as the medina of gambling (the mecca, of course, being Las Vegas). Gambling was the best way to gain tax revenues, increase jobs, and establish tourism in NJ. For the people, though, it was more complex. For them, expanded gambling was a way to increase crime and corruption in the City.
This fear made most people vote against reconstructing gambling resorts in the 1974 referendum. Legalizing casinos and bringing back the old glory to the City cost millions. A referendum renewal followed in November 1976, only passing by a slim margin. It was the only way to save the City from economic doom.
In 1974, New Jersey voters rejected a statewide referendum to legalize casino gambling. However, two years later, they passed another one that legalized casino gambling exclusively in Atlantic City – making it the second state in the USA after Nevada to allow such activity. The first casino in Atlantic City was Resorts which opened its doors to the public in 1978.
1978 saw the rebirth of a new gambling era in Atlantic City. Then came the legalization of Resorts Atlantic City at The Boardwalk, where it continues to operate in all its glory. It was the first legalized casino to reopen in Atlantic City. Soon after, Caesars Boardwalk Regency and Bally’s Park Place, currently known as Bally’s Atlantic City, followed.
From then on, the City never looked back. In 1981, Atlantic City topped $1 billion in casino revenues. In 2007, the revenues rose to their all-time high of $5.2 billion. But every period ultimately ends, even in the gambler’s haven of Atlantic City.
The Economic Boom and Casino Construction
The casino construction boom of the 1980s was a period of significant growth and expansion for the city’s gambling industry. This boom was fueled by the legalization of casino gambling in New Jersey in 1977, which paved the way for several new casinos in Atlantic City.
During this time, several prominent figures in the casino industry, including Donald Trump and Merv Griffin, invested in the city and built large, luxurious casinos, which helped to transform Atlantic City into one of the premier gambling destinations in the United States. The casino construction boom also impacted the local economy, creating thousands of jobs and generating tax revenue.
However, the casino construction boom was not without its challenges. By the decade’s end, the Atlantic City casino market had become highly competitive and saturated. Increased competition from other gambling destinations led to financial difficulties for some of the city’s casinos and their owners, including Donald Trump.
The Era Of Trump (1987-2000)
With the new constructions and better-than-ever casinos, the City saw flocks of gamblers and tourists in just weeks of new openings.
The revenue came flooding in, and Atlantic City was back on with a neon sign. The casino business was booming, so much so that in 1988, the City brought home revenue of $2.73 billion, whereas Las Vegas lagged with just $1.944 billion.
The Rise and Rise of Trump Properties
Trump started in the 80s, and by the end of the next decade, he owned three out of 12 properties that dominated the City. But his plans were even bigger. With the revenue coming in from Trump Castle, Trump Plaza, and Trump Taj Mahal, he set out to buy more land on the outskirts of the town near Atlantic City Expressway.
Over the next several years, Trump became a major player in the Atlantic City casino industry and built several large casinos, including the Trump Taj Mahal, Trump Plaza, and Trump Marina. At the time, Atlantic City was one of the largest gambling destinations in the United States, and Trump’s casinos were considered some of the most successful in the city.
However, by the 1990s, the Atlantic City casino industry faced competition from other gambling destinations and Trump’s casinos began to struggle financially. Trump was forced to declare bankruptcy several times and eventually lost control of most of his Atlantic City properties. Despite these challenges, Trump continued to be involved in the casino industry and maintained a presence in Atlantic City until the early 2000s.
In 1985, when Hilton was set to open to the public with an investment of $320 million on a marina casino project, it was denied a casino license. What’s a hotel without a casino? Trump stepped in, bought the property, finished construction, and acquired the license. He opened up in June with the name changed to Trump Castle.
The move didn’t sit right with the partner, The Holiday Inn, and the company filed a lawsuit against Trump. But within a year of the case, Trump bought all shares of $223 million, ended the partnership with The Holiday Inn, and renamed it Trump Plaza.
From 1980 to 1989, Both Trump’s properties were the local industry’s revenue leaders for almost a decade. Trump became the ultimate casino legend, with revenues touching an all-time high of $305 million in 1989. At his height, Trump also failed to conquer Bally’s. However, he rectified his mistake and made a successful play for Resorts.
To his good fortune, Resorts International was already finding it hard to stay afloat. This was a great opportunity for Trump, and he bought the controlling shares in the company. Somebody else’s dream became his successful reality, and he got hold of the Taj Mahal for $273 million.
In 1988, Merv Griffin purchased the Resorts International casino and hotel in Atlantic City, which he later sold to Donald Trump. The sale was seen as a major transaction in the Atlantic City casino industry and marked a shift in the balance of power between the two businessmen.
However, the relationship between Trump and Griffin was not always adversarial, and they were known to collaborate on various projects over the years.
Overall, both Donald Trump and Merv Griffin left a significant impact on the Atlantic City casino industry and their legacies continue to be remembered as two of the most successful and influential figures in the city’s history.
Trump’s Fall from Grace
Donald Trump’s downfall in Atlantic City was due to a couple of factors, including increased competition, and a decline in the city’s overall economic situation. He also has financial mismanagement to blame for the fall of his massive regime in AC.
In the 1990s, Trump’s casinos in Atlantic City began to struggle financially, and he was forced to declare bankruptcy several times. Despite efforts to restructure his debt and revitalize his businesses, Trump was eventually unable to save his casinos, and he lost control of most of his properties in the city.
Trump’s financial struggles in Atlantic City also harmed his brand and reputation, and his involvement in the casino industry became a significant source of controversy and criticism. Despite these challenges, Trump continued to maintain a presence in Atlantic City for several more years, but his influence and impact in the city were greatly diminished.
Borgata: The New King of Atlantic City (2000-2010)
Gaming revenues were at their all-time high in 2000. The New Jersey Casino Control Commission Annual Report claimed that all 12 casinos brought in $4.2 billion in 2000. The major portion of these profits was from lost machines, and because Taj had a significant number of slot machines, 4,700 slots to be precise, it was the uncrowned king of the lot.
The new face of AC started to take place when casino legend Steve Wynn decided to build a new-styled, Vegas-worthy casino property in the marina area. His plan didn’t come to fruition due to the government’s delay in building an underground channel from the Atlantic City Expressway. However, there were many oppositions to this idea, from the people and Trump, because the channel didn’t have an exit plan at the entrance of the Trump Marina.
Later, the exit was added to the original plan, and hence began the construction of the Atlantic City-Brigantine Connector. The old hotels now looked outdated, and there was a dire need to bring new blood to town, and this is how AC adapted to Las Vegas-worthy casino decor.
The Change of Hands: From Trump to Borgata
Although Wynn started big, it was acquired by the now-famous MGM Mirage Company. MGM and Boyd Gaming opened Borgata Hotel Casino & Spa. It featured 200 table games. But the highlight was the 34-table poker room, the first of its kind.
The competitors also added slot machines to the lot. In addition to the new gambling floors and slot machines, casinos also added chic entertainment options as well as fine dining restaurants; this was a new addition and one that the visitors highly appreciated.
The focus moved from slot machines to poker rooms, and Borgata was the ringleader. The hype went huge when Chris Moneymaker became the ultimate champion of the World Series of Poker Main Event in 2003, despite being an amateur player. Borgata hosted live matches and added 84 more poker tables to its name.
Atlantic City became the hub of poker players with Borgata as the main lead.
The year Borgata opened its joint venture with MGM, the two did a roaring business of $600. Before these two, the uncrowned king was the Taj Mahal. However, in 2005, Borgata’s casino broke all records, and it’s still the master of the game. In 2005 the recorded revenue was $700 million, the highest number AC has ever seen.
The Peak Era 2006 and The Fall Till 2010
Till now, Atlantic City has been known for its 12 raving casinos. Then the Sands closed in 2006. The remaining casinos still pulled in revenues of around $5 billion. But it didn’t last long. 2007 saw a fall in revenue by $0.4 million, with Borgata still bringing in most of the revenue. In 2008, it dropped to $4.5 billion and then $4 million by the next year.
The profits have been low since 2016; as reported by the UNLV Center, they are half what they were in 2006 when the City was at its peak.
The Rise and Fall of Revel
Following Borgata’s lead, Morgan Stanley, along with development group Revel Entertainment started planning for a bigger and even more significant resort than the Showboat.
Their plan, however, did not come to play until the mid of 2007. The original plan was to launch the hotel in 2010, with 700-foot towers and a total of $2 billion budget for construction. The hotel was supposed to have the largest gaming space with 4,000 rooms and 150,000 square feet reserved for slots, casino floors and poker tables.
The budget didn’t allow the initial plan to commence, so it was scaled and changed to one tower only. The opening date was postponed till 2011 due to budget cuts, labor issues and funding. The Revel finally opened against all odds in 2012, but the glory didn’t last long. It was finally shut down in 2014.
The Fall and Revival of the Gambling Hub (2010 – Present)
Borgata seemed to be the only shining star in AC’s crown; the rest were slowly shutting down the business. 2014 saw more closed doors on the Broadwalk than ever before.
With regional casinos, people were finding it tiresome to visit AC for gambling; there was nothing new to excite the audience. Big names like Golden Nugget, Atlantic City Hilton and ACH also lost their shine and were shut down. There were redevelopment plans, but those didn’t include gambling. Instead, the owners wanted to change the hotels to indoor water parks and convention centers.
Caesars Entertainment also shut down its biggest earner, The Showboat, to pay for others in 2014. It was reopened again, but a casino floor wasn’t part and parcel of the hotel anymore.
After 3 decades of successful operations, The Trump Empire ended as well. With no new owner, Trump Plaza went off the map for good.
The Era of Sports Betting
Soon after sportsbooks were legalized in Atlantic City, Borgata took an early leap and jumped at the opportunity. Fanduel started an entire month after Borgata and Monmouth began taking bets. Within a month, the betting locations tripled, with Bally’s, Harrah’s, Golden Nugget, and Resorts Casino jumping on the bandwagon.
The Online Future
On-site gaming revenues were declining, but the day was saved with the introduction of online gaming. A decade later, in 2016, the online igaming industry locked in $196.7 in profits. The next year, the yields rose to $246 million. Igaming turned the table, and the revenue increased by 32 percent from 2015 to 2016. The increase didn’t stop there; another 25% was added to this figure in 2017.
The New Beginning
In June 2018, two new Atlantic City resorts welcomed visitors on the same day. The Seminole Tribe of Florida also acquired the dead Taj Mahal space for a mere $50 million. From the glorious Taj Mahal, it became the Hard Rock International brand, with a 60-foot guitar adorning the entrance. It had everything, from online gaming to slot machines to gaming tables. They even promised to launch a physical sportsbook.
With the increase in individual casino revenues and sports betting operations up and running, the revenues are steadily increasing. A new Era is yet to begin; the Oceans Resort and Hard Rock’s success indicates that Atlantic City is not yet finished.