The Atlantic City Gamble

In November 1976, the state of New Jersey embarked upon a bold experiment when the voters approved a referendum to authorize casino gambling in Atlantic City. Expectations were high: the gaming industry could rejuvenate a dying city core, employment would swell, the tax base would broaden and welfare rolls diminish, tourism might spread through the state, and the cruel spectacle of a poverty-stricken community would be eliminated.

The Atlantic City Gamble reports the results of this experiment and evaluates casinos as a tool for economic revitalization, a painless source of revenue. The casinos are enormously profitable—but for whom? The city has paid a huge toll in human and economic hardship. There are 30,000 new jobs, but little spillover into non-casino employment. Crime rates have skyrocketed. Housing has been priced beyond the reach of minority groups and the elderly. In 1982, the casinos paid more than $117 million in state taxes, but much of the projected bonanza to Atlantic City has been swallowed by the industry’s need for expanded municipal services, such as police protection. Fears of the old connection between gambling and organized crime may be exaggerated, but few can deny that the gaming industry—with its immense daily cash flow—harbors a vast potential for corruption.

The state promoted visions of a glorious rebirth, but it failed to provide a governing mechanism that could produce the promised rewards. Would better planning and research enable any government to cope with such instant large-scale business and the political clout it carries? Economic strangulation has motivated at least eight other states to think about letting in casinos. The decisions they make will have far-reaching social and economic consequences, and must be based on a set of facts as accurate and comprehensive as possible. In searching out the lessons of Atlantic City, the authors have provided a sobering glimpse into the intricacies of legalized gambling.