Atlantic City: Down But Not Out

atlantic cityBy Ed Sheppard | The Save Jersey Blog

Atlantic City has been generating some negative headlines recently. There’s no question about that. The Atlantic Club closed in January, Showboat and Trump Plaza will be closing at the end of the summer, and Revel may close if someone doesn’t buy the property by mid-August.

Everyone agrees: the decline in casino revenue that’s forcing these closures is catalyzed by the over saturation of casinos in the Northeast as legalized gambling in Pennsylvania and New York has siphoned away customers and dollars. With these closures, 20-25% of Atlantic City’s casino workforce will lose their jobs. Many are calling this the beginning of the end of Atlantic City.

Well let me tell you something, Save Jerseyans…

Atlantic City is down, but it is not out. (And before you accuse me of being a naïve, unrealistically-optimistic idealist for saying such a thing, let me point out to that you would be the first person to ever call me that).

Atlantic City can come back. Is there an easy path for a comeback? No, the comeback path and easy path are rarely the same thing, Save Jerseyans. Not in this state. I believe Atlantic City has a tough journey ahead of it, but if it chooses to make it, it can comeback. Let me explain why it can make a comeback, and then the path I believe it must follow.

So why Atlantic City is poised to make a comeback? Well, you may have missed it, but there has been good news for Atlantic City:

- Republican and openly gay Mayor Don Guardian has been leading the charge to make Atlantic City a leading LGTB destination, including landing the major LGTB draw Sandblast. The LGTB market is a lucrative one, as economists have pointed out is it both an underserved market and a demographic who spends more per capita then the average consumer

Predictably, I am willing to bet there will be anti-gay people offended by the fact I am saying it is a good thing that Atlantic City is going after the LGTB market, and pro-gay people offended by the fact that I pointed out that economists have observed the LGTB demographic’s economic behavior. My suggestion to these people is to go out and grab a drink together, get a room & throw on some Barry White, then 9 months from now give birth to the most easily offended human being ever to exist, whom I will then offend.

Thus, Atlantic City is putting itself in a position to secure a new customer base looking for a friendly destination that tends to spend more than most patrons.

- Mayor Don Guardian. He is open to making tough choices that for years politicians have avoided making. He is willing to think outside the box to accomplish goals. He is more concerned about accomplishing goals and bettering Atlantic City than opinion polls. He is also a steadfast champion and cheerleader for Atlantic City. I have seen him speak, and his passion and optimism for revitalizing is infectious but balanced with realism; that’s who you want at the helm during a time like this.

- There are casinos making money in Atlantic City. You wouldn’t know it from reading the newspapers. Borgata continues to see quarterly growth in its revenue. Golden Nugget’s investment in remodeling is paying off. The Tropicana continues to draw crowds and dollars. So there is a way to grow and be profitable in Atlantic City, and there are casinos in Atlantic City that people are drawn to.

- The beach. Atlantic City has the beach. Las Vegas has sand and plenty of attractions but the one thing they can’t replicate is an ocean. Some casinos have finally started to take advantage of Atlantic City’s beach location in a variety of innovative ways. No other casino in the Northeast has a beach with a swimmable ocean to take advantage of.

- United Airlines is now flying into Atlantic City Airport. Visitors can now fly direct to Atlantic City from most places in the country instead of flying to Philadelphia then driving down the Expressway.

- Miss America is back in town. ‘Nuff said.

- Bass Pro Shops is coming to town, too, adding to an already attractive outdoor shopping complex.

- Strong non-gambling nightlife (i.e. shows and clubs) are on the upswing.

- Lots of off-season convention space.

- The past two years have seen a $162 million increase in non-gaming hotel revenue.

So now that we have seen some of the things Atlantic City has going for it, let’s take a look at how I believe Atlantic City can revitalize itself. Everyone needs to their part, the state, the city, the casinos, & the people:

- Pick an Identity

Las Vegas is known as a playground for adults. What is Atlantic City known as?

I couldn’t come up with an answer, either.

Atlantic City needs to pick an identity and embrace it. Is it a shore town with casinos? A casino town with beaches? Is it a town for family vacations? Is it a playground for adults? It is a year-round resort? You see where I’m going with this. “DO AC” is a fine slogan if people know what they’re supposed to do there.

Pick an identity, embrace it, market it. Because right now, no one knows what Atlantic City is.

- Clean Up the Town

I know this may offend people who live in Atlantic City, because you never like to hear bad news about your home, but you can’t fix a problem unless you admit there is a problem.

The place looks bad. It is not inviting to visitors. The streets have more pockmarks on them than Ray Liotta’s face. The boardwalk is dark and does not feel safe. Atlantic City is a resort town of 40,000 people but it somehow feels like you are driving through the worst part of that warzone called Chicago on the way to go gamble. Potential paying customers are afraid to come to Atlantic City as a result.

This needs to be remedied.

Abandoned properties need to be bulldozed and replaced with well-lit temporary parks that are appealing to the eye until developers can be found.

Funds from the CRDA need to be diverted from marketing and sent to two places: the public works department to fix roads and police departments to hire more cops to patrol the boardwalk and casino areas. FIX AC before you DO AC.

Eastern Pennsylvania did itself no favors with the placement of its casinos. Parx is across from a strip mall; Sugar House in the middle of a bad Philly neighborhood. There is nothing exotic or magnetic about their locations that draws people there; it is simply convenience. Atlantic City could easily steal back customers from Eastern Pennsylvania by simply making the town a place people want to visit, by becoming a more DESIRABLE location than your competition.

- Emulate What Works

As I mentioned before, there are casinos that are doing well. Harrah’s, Borgata, Tropicana, the Golden Nugget… these are places that people want to visit. So the other casinos should emulate what works!

In my opinion, these 4 casinos do so well because they strive to remain relevant in a modern world. They are aware it is 2014 and their casinos feel like it. Not every casino in Atlantic City can boast that. Some casinos feel dated in both their physical location and thinking. This needs to change.

I’m not saying every casino needs an ultra-modern remodeling. The Tropicana certainly has not done that, but they continue to draw big crowds by keeping their entertainment relevant (I love the Quarter!). There is variety, there are options, in these good casinos. Their shows are varied across genres and styles and include well-known names, the in-hotel shopping is plentiful, the dining selection varies from high-end to late-night comfort food, and the bars/clubs cater to more than one type of crowd.

Oh, and their casino floors do not reek of week-old cigarette butts.

So this is on the casinos. You have to spend money to make money. Those who are doing the right things should continue to do so. Those who are not need to start copying the other guys.

- Open the Doors to More Non-Gaming Entertainment.

Las Vegas is such a desirable destination because there is more to do than gamble. There is literally fun on every corner of the town.

Atlantic City needs to do that.

It is not incumbent upon the city to invest in such ventures. It is incumbent upon the city to create an atmosphere where the private sector can invest in non-gaming ventures.

What am I talking about?

Some of you might remember my Save Jersey post on the proposed Motion Picture Hall of Fame, an idea which I believe would have been great for Atlantic City (and still can!). And how city leaders at the time dragged their feet since there was nothing in it for them.

That’s what I’m talking about.

Non-gaming hotel revenue increased $162 million over the past two years. That doesn’t include the revenue from the Walk, Atlantic City’s open air shopping mall. There is money to be had in non-gaming entertainment, and those businesses will attract people to the city and then the casinos.

What Atlantic City needs to do is let businesses know that it will welcome them with open arms instead of with hands out (or worse, with a palm up that needs to be greased). Do that and they will come.

-Allow Casinos to Get Involved in Politics

The highly regulated casino industry has been black balled from participating in the political process. The idea was allegedly to combat corruption. The real world effect? For over 30 years casinos have had no input on Atlantic City’s priorities, and instead have watched Democratic mayor after Democratic mayor ignore the casino industry and run the place into the ground. As a direct result of this misguided policy, for over 30 years, tax dollars from Atlantic City have been funding failures in North Jersey instead of being invested in Atlantic City and South Jersey. Let casinos into the process and lobby for their interests. No one is more interested in America’s most famous beach resort surviving another winter then them!

-Let Cabs Pick Up Customers from Outside the City

Atlantic City cabs can only pick up fares within city limits. If they drop off a fare outside of city limits, the must drive back to Atlantic City with an empty taxi. Considering that Atlantic City’s airport is outside of city limits, and the number of people who want to cab into AC because they do not want to drive home drunk, this is a problem. A patchwork of quasi-legal and illegal taxi services pick up the slack for those who want a ride into Atlantic City from the surrounding shore towns and airports. Make it legal for Atlantic City cabs to bring customers to Atlantic City, for casinos to be able to send cabs to pick up their patrons. There’s no reason why we should be making it harder for paying customers to get to Atlantic City.

- Take Advantage of the Beach Location

Seriously. It’s been over 30 years and no one has done this? 

Some casinos have just started to do this as I mentioned above, with Resorts opening a Margaritaville Beach Bar and Golden Nugget opening the Deck. It boggles my mind that it didn’t happen sooner. I can explain this point with an example:

Saturday night, I was at the Deck at the Golden Nugget. It is an outdoor bar along their marina. There was a live band playing really good music in front of a big dance floor. There was a refreshing ocean breeze keeping everyone cool. People were partying in their boats, including some attractive lady boaters in very stylish swimsuits. Young servers in Daisy Dukes were keeping folks well stocked on drinks & seafood while showing off their mid-riffs. And I was playing blackjack, outside, in the middle of all of this, sipping on my Jack & Coke, just drinking it in and cursing the idiot next to for hitting on 17 and ruining the dealer’s chance to bust.

New York and Pennsylvania have nothing that can compete with this. Nothing.

- No North Jersey Casinos

It is unconscionable that Steve Sweeney and Ray Lesniak are trying to open up casinos outside of Atlantic City. It is damn near a crime against humanity that Jim Whelan, the state senator representing Atlantic City, supports their plan.

The Northeast gambling market is SATURATED, Save Jerseyans. SATURATED. Adding another casino, therefore, is adding more supply to a market with too much supply already!

North Jersey casinos will FAIL! See my previous point re: Philadelphia casinos. There is not enough demand for them. New York day trippers alone cannot sustain a North Jersey casino, yet that is apparently the plan. Adding casinos in North Jersey, an area which is already usurping Atlantic City tax dollars, will usurp customers as well, hurting Atlantic City while not generating enough revenue to support themselves in the long haul. It is a recipe for disaster.

- To Hell With the Feds with Sports & Online Gambling

The Feds say we can’t take bets on sports. The Feds say we have to limit on-line gambling to user physically in New Jersey. To hell with them. Take bets on the Mets. Let someone in Omaha play poker. Look at the IRS, the Border Patrol, the White House. If the Feds aren’t following the Feds’s rules, why should we? Ray Lesniak recently said something to this effect and he’s not wrong about that at least.

- Land A Comic Con and More Conventions will Follow

Nerds spend money. Embrace them.

I was staying at the Tropicana while a horror movie fest was occurring. Their big draw was Corey Feldman. And people came out for it. They spent money at restaurants, bars, the tables, and night clubs at the Tropicana, they were everywhere. And this was a small event by nerd standards.

Atlantic City needs to land a Comic Con. Comic Cons are huge events that draw in big crowds who spend money. Throw one of those, not only is the event good for the local economy, but you demonstrate to the convention world that you operate on a whole other level, that Atlantic City is in the major leagues, not the minor leagues. Big business should follow.

- Convert Non-gamblers

Atlantic City has a vibrant nightlife with many good nightclubs and bars that people frequent. Unfortunately, the vast majority of these patrons walk right by the slot machines and table games as they arrive and leave; they don’t gamble.

So let’s try to make them gamblers.

Free idea: Casinos should give anyone who walks into one of their nightclubs a player’s card with $25 slots/gaming credit that expires within 24/48 hours. Just give someone already in your building an excuse to start gambling. That $25 will be made up pretty fast. The house always wins if the house can convert dancers into players.

 

Ed Sheppard

Ed Sheppard

Jersey Shore small businessman Ed Sheppard got his start in Republican politics on the "other" coast as President of the San Francisco Young Republicans and Vice-Chair of Communications for the San Francisco GOP.

11 Comments

  1. Atlantic City was created in 1854 with liberty–thousands of individuals free to buy land, build, open, and run creative businesses. Those with hard work and talent were free to keep the profits they earned and build even bigger and better projects. Since the 1960’s, Atlantic City was smothered by government. High taxes and complicated laws made political connections, tax abatements, and pay-to-play deals the key to success. Talented people like Steve Wynn were chased out, while the same losers kept getting government jobs, contracts, and benefits to produce one failure after another. Facebook Liberty and Prosperity.

  2. Seth squarely hit the nail on the head. Gov’t HAS to get out of AC and let the business people do what they know how to do without interference.

  3. Excellent excellent article and things I have been saying for years with people saying Atlantic City is dead. I did want to point out though too that some of the things you say need to be done are in fact being done or about ready to start in the next couple of months.

    1) Pacific Ave is FINALLY getting repaved with new lighting and other pedestrian friendly things.

    2) Atlantic Ave facades will be getting a major makeover.

    3) Harrah’s Covention Center – which will be the largest on the east coast – will be opening in the next year and will be attracting the conventions you rightly said AC needs.

    There are a lot of great things going on in AC but the NJ media seems primarily concerned with the negative. It is almost like they WANT AC to fail.

    http://www.njcrda.com

  4. LOVE, LOVE, LOVE! Thank you The Save Jersey Blog!

  5. Call Disney … given them a huge hunk of beachfront land and a pier for 1 buck and no taxes for 10 years … then government get out of the way … call it a start

  6. I went to a council meeting in 2004 & warned u ( Atlantic city) what would take place if other states got casino gambling. But u laughed at me. Is it too late now? U have a very VERY small window of opportunity. REBUILD THE NEW STEEL PIER- high tech. Rebuild the boardwalk 1st class with the 500 club. The wax museum. Nascar experience. Steven Spielberg- game work. High tech arcade.. build Broadway show theaters. Movie theatres bowling alley. Etc. Get the hood out of Atlantic city &throw out gangs,drug dealers,riff raff etc. Maybe Atlantic city Will live. ??? Ignore more warnings and become ASBURY PARK. MEANS NO.BUSINESSES AND NOBody’s home.

  7. The first thing we have to realize is the farce that is being perpetrated by those with interests to move gambling northward. It is a known fact that the Trump Plaza has been deliberately cutting all amenities in an effort to fail. They make $3M dollars annually on the beach bar alone. What did they do? They leased it to an outside company for 2014 so they don’t have to show profit.

    There are so many underhanded tactics designed to create an image of a failing industry and, if we look closely. we can see the reason is to establish a monopoly on the boardwalk consisting of Caesars and Carl Icahn properties. Did you know that Carl Icahn (the owner of Tropicana) owns the debt on the Trump properties?

    It’s time to inform would-be patrons and the general public about the many wrongdoings, including political/media aligned exploits, which are designed to influence public sentiment into believing casinos in Atlantic City are insolvent and barely profitable. All of this and a list of other things have come at the expense of workers who have dedicated their lives to this industry and failed promises for more than 35 years!

    Did you know that Caesars circumvents paying ANY NJ taxes on their online gaming operations after creating another company (Caesars Interactive) to operate it in Atlantic City while diverting the revenue elsewhere? Who constructed that deal?

    Good business NEEDS competition. The Atlantic City market hovers at $3 BILLION a year. That’s substantial for a small town with only 10 casinos (soon to be 7).

    Did you know that the recently closed Atlantic Club and Claridge casinos put thousands out of work? Did you know that Caesars purchased the Atlantic Club at a bid that was $2M dollars LESS than a privately funded group (after a judge allowed it on the nonsense basis that the other group may not have been able to fund it)?

    Did you know that Caesars structured the sale of their Claridge property to PREVENT buyers from opening a casino there? Did you know that they recently structured another deal with the same prerequisites and with the same company that purchased Claridge for purchase of the Atlantic Club?

    And, in another incident, we find Governor Christie, who is out on “tour” trying to explain the NJ pension woes, approved a $1.7B pension fund investment in (get this), TPG – Apollo. TPG Apollo is the company that purchased all of Harrah’s (now Caesars) and is carrying over 25 BILLION in debt. This may seem as an unrelated incident, but $1.7 Billion is not chump-change. How did Christie benefit from this transaction and how much ill-effect did it have on the pension fund?

    Atlantic City is being exploited by politicians who know very well how small its political voice really is. It’s time to get mad as hell and say “I’m not going to take it anymore”.

  8. How about buying a section of property and turning it into a venue big enough to hold sporting events like the X Games? Keep it open year round for everyday use as well. Within the last 3-4 years competitions like American Ninja Warrior have become money makers. Open a rec area for these athletes to train and compete in.

  9. Yeah I just received my tax bill $800 increase per quarter. Yeah the trying to fix the city on the backs of homeowners.my neighborhood has tore up roads and abandon houses everywhere.And the rest of the houses are for sale! AC political machine is 20 years late and billions short.I lived in Las vegas they have clean streets well lit roads .clean city .well policed .Dont dare try to interrupt business they work on roads at night .100% geared for business and the casinos pay for roads and schools.think outside the box is right ! Why don’t the bring wind mill factory to that baron waist land Bader field Colorado has so many orders they cant keep up. Oh yeah they turned down that huge offer to develop . Know it not worth anything . The city treated Mattalica so bad they said they will never comeback .only 60000 custumers lost even tho they said it was one there best crowds ever. I to am fed up its time to kick these lifer politicians out on there ass . I have been to city hall they all walking around in there silk suits.time for fresh ideas .create a citizen Council to over see these so called city managers .Fed up taxpayer take the city back.

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