Atlantic City (AC) can’t seem to catch a break. Years of mismanagement that culminated in former mayor Frank Gilliam being busted for wire fraud and theft, combined with a slower economy, have taken their toll on the city’s ability to generate strong revenues. Things got so bad that the state had to step in and essentially take over how the city’s money was managed, and things haven’t gotten a whole lot better. Political in-fighting and a lack of initiative on the part of the community as a whole to make changes have forced AC to continue to struggle, which led to Hard Rock International CEO Jim Allen saying the city is in “worse shape” now than it was in 2017. Things started to improve and revenue started to increase, but the coronavirus came in and erased all the forward momentum. After 21 consecutive months of growth in gross gaming revenue (GGR), it was all over, and at least one city representative doesn’t think AC will ever be able to recover.
AC had nine operating casinos that employed 26,540 workers as of the beginning of March. However, almost all of them have either been temporarily or permanently let go. Those fortunate enough to be called back to duty may still have to wait a lot longer, as the state’s plan to relaunch commercial activity, just like in many other states, will occur in phases – casinos aren’t a priority. According to the executive director of Stockton University’s Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism, Rummy Pandit, “When properties do eventually open to the public, it will likely be gradual and scaled to match consumer demand. Consumer confidence and comfort with travel will likely take the longest to rebound, and it may be some time before visitor volume returns to pre-pandemic levels. We likely won’t see a return to pre-pandemic levels in time for the 2020 summer season, but do anticipate looking at a more ‘normal’ season in 2021.”
Fitch Ratings recently forecast a gloom outlook on AC, asserting that the Casino Reinvestment Development Authority, the fund that is meant to put the city back on its feet, is not looking healthy. It expects the fund to miss out on at least $220 million and downgraded the CRDA’s bonds to reflect “significantly increased uncertainty regarding the collection of luxury tax revenues commensurate with the material disruption in leisure, convention, and gaming markets, which may last for an extended period of time.”
All of this paints a drab picture for AC. There is still some assistance provided through activities such as online gaming and limited sports gambling, but they don’t nearly make up for the losses. This leads AC City Council President George Tibbitt to see things possibly getting worse before they get better, telling Politico, “We have the potential of an Armageddon in Atlantic City.” Maybe we only thought the Wild West was a thing of the past.
