Atlantic City Attempts To Endure As It Has Before

Article by : Helen Oct 12, 2020

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Life ain’t been no crystal stair, no certainly not for Atlantic City. Once dubbed “The World’s Favorite Playground”, the city is synonymous with winning and losing big. And like so many other times in its 170-year history, such as when in 1854 a ship carrying over three hundred people tragically sank off the shore, the city will have to invest and overcome. In response to the shipwreck, the then newly formed Atlantic City constructed a lighthouse that still stands today. Flash forward to 2020 and the city is facing over 20% of workers unemployed without a clear timeline forward due to restrictions meant to curb the spread of Covid-19 in New Jersey.

Atlantic City’s casinos were ordered to close on March 16th in precaution of Covid-19. 107 days would pass before they would next re-open on July 2nd, and even then casinos were only allowed to re-open at 25% capacity with no amenities like indoor dining, bars, nightclubs, or entertainment. Experts indicate that while being closed, it’s estimated that the Atlantic City casino industry suffered over $110 million in operating losses in the second quarter of 2020 alone. One casino hit particularly hard, the Borgata, which employed 14% of the total Atlantic City casino industry had over 2,000 less employees in August of 2020 than they did in August of 2019.

An underlying factor of the Borgata’s situation is that its casino featured the most non-gaming amenities such as food, beverage, and convention space. Unfortunately, the Borgata also made some of the most money in Atlantic City on Poker (over $17 million in 2019), and there’s no timetable for when poker may return to Atlantic City. Contrary to popular belief, poker isn’t a big money-maker for casinos. In fact, for comparison, no other casino in Atlantic City posted earnings in the double-digit millions from their poker rooms. Even the World Series of Poker branded rooms in Ceasars’ casinos, Bally’s and Harrah’s, reported less than $5 million in earnings combined for 2019. Still, the first Atlantic City casino that can bring back live poker in some capacity will have a draw that none of the other casinos can compete with.

It does bring bottom line revenues to the other property amenities, such as restaurants, bars, and even other non-poker gaming. … I would say you gain more from it as a marketing tool for visitation.

Casino workers have been offered work in other roles, such as greeters or housekeepers, but with still over 30% of casino workers currently unemployed; there’s a push for a state relief bill from industry CEOs and Union members. The proposed legislation recognizes that years of economic progress have been reset due to Covid-19 and offers solutions in the form of tax breaks for casinos on gross gaming revenue and a deduction against revenue equal to the number of promotional credits used by customers each month. Both of these tax breaks would take place retroactively from July 2nd of, 2020, until July 2nd of, 2021. Due to concerns that such tax breaks would drastically reduce the funding for senior and disabled services in New Jersey, an amendment was added to ensure funding remains the same for senior and disabled services as it was pre-pandemic. The bill has a requirement that casinos hire as many former and new employees as business picks up.

Given that Atlantic City provides jobs to over 30,000 individuals, this is a bi-partisan issue that should ultimately be agreed upon in the state congress. The AC casino industry has been left out of any sort of significant pandemic package, and Atlantic City can come back from this even stronger with the proper plan and a fighting chance.