There's a lesson for Florida in Atlantic City, the New Jersey beach town that sought to re-create its former glory by marketing itself as Vegas East. Three decades later, the risks of gambling on such an economic development model are apparent. Unemployment and poverty both remain high, and one out of every three casinos is threatening to shut its doors. The industry is not the panacea supporters claim it is, and Floridians should take note.
The irony is that Atlantic City's failure comes as the gambling industry is making increasing inroads across the country in convincing politicians that expanding gambling will solve their tax revenue woes — or at least allow them to capture some of the money flowing to nearby Indian reservations' gambling operations. That's been the pitch in Florida, where the Seminole Indian Tribe has seen its casinos, including one in Tampa, grow exponentially while the state's parimutuel industry of dog and horse tracks and jai alai frontons has had little success in competing.
But as the New York Times highlighted, it's increasingly apparent that there is a saturation point for gambling and it appears to have been reached on the East Coast. Even as the economy has rebounded since the recession, four of the 12 casinos in Atlantic City have announced since January that they plan to close if a buyer cannot be found.
The potential loss: 8,000 jobs, or about 25 percent of those who work in the city's casinos. Already, the city's unemployment rate is 11 percent and its average household income is less than $30,000 — less than half that state's average. Nearly one in three residents lives below the poverty line.
The situation in Atlantic City prompted Donald Trump, who started his casino business there and still owns a small stake in the failing Trump Plaza, to tell the Philadelphia Inquirer that he expects more closings across the country because "there are too many" casinos.
Now Atlantic City's strategy is to try to diversify its tourist offerings, including enhancing convention facilities and adding children's attractions — a route Las Vegas began more than a decade ago with significant success. According to the New York Times, only 30 to 35 percent of revenue at Las Vegas casinos is now tied to gambling.
Florida long ago provided a wide array of offerings to be appealing as a tourist destination — including the beaches, theme parks and parimutuel gambling. And there has yet to be a compelling case that adding mega-casinos in South Florida, as some lawmakers unsuccessfully proposed last spring, would dramatically enhance the state's jobs picture or its bottom line. Nor is there an acknowledgement of the increased potential for societal costs from gambling addiction for families, businesses and public safety. Lawmakers who are spending their time before next spring's legislative session plotting how to best pitch more gambling should consider Atlantic City's plan for tourism growth: to become more like Florida.