Atlantic City Economy Under Threat from Casino Expansion, Report Says

_{Online casinos are expected to greatly impact the gaming economy in the Atlantic City area. (Photo: Backyard Productions / Alamy)}

The Atlantic City economy could lose as many as 8,000 jobs over the next decade in the face of casino expansion and the proliferation of online gambling, according to a report released on Aug. 25 by the Atlantic County Economic Alliance (ACEA).

In the report, known as “The Greater Atlantic City Casino-Hotel Employment Exposure Assessment,” the ACEA explains how gaming revenues and associated taxes could continue to grow in New Jersey even as the job market suffers.

North Jersey Casinos Part of Doomsday Scenario

In the report, ACEA Director of Business Development Dr. Max Slusher outlines multiple scenarios, including a worst-case scenario that includes the three casino resorts that are expected to open in New York City by 2030 as well as the opening of two proposed racetrack casinos in North Jersey at the Meadowlands and Monmouth Park.

Even without those North Jersey casinos - which won’t be on the ballot for voters in New Jersey this fall - the ACEA report suggests up to 5,105 jobs in Atlantic County could be at risk.

“This is a planning document, not a doomsday prophecy,” Slusher stated. “But the size of the exposure is real, and the region needs to see it clearly before more competitive pressure is added.”

According to Slusher, one of the pressures comes from online gaming. While online casinos and sportsbooks bring in significant tax revenue for the state, they don’t have the same positive jobs impact as Atlantic City’s nine brick-and-mortar casinos.

“Online gaming produces much more tax revenue per local job than the traditional casino-hotel model,” the report states. “A bricks & mortar casino…needs dealers, slot attendants, housekeepers, cooks, servers, security, maintenance workers hotel staff, vendors, parking, entertainment, and transportation. An online gaming platform needs far fewer people in Atlantic City.

“That is why the statutory Casino Revenue Fund can be setting records while the Greater Atlantic City labor market weakens,” the report continues. “The money is still flowing to Trenton. The same level of work is not flowing to Atlantic City households.”

Online, Live Expansion, Economic Factors All Threaten Atlantic City

The report identifies five pressures that could be placed on Atlantic City by 2025. Those include:

• Online gaming;

• New York City casinos

• Two North Jersey casinos;

• A future recession

• The “ultimate worst case,” in which the North Jersey casinos grow into full resort complexes.

The ACEA report models the potential impacts of the first four factors, though not the fifth, the authors note that there are too many assumptions that would need to be made to create a credible model in that case.

Using these pressures, the report estimates that even in the most optimistic projection, at least 8.2% of Atlantic City’s $2.89 billion in brick-and-mortar gaming revenue is at risk of exposure by 2035. The baseline scenario used in the report sees more than 28% of revenue at risk, while the stress scenario – which includes North Jersey casino expansion – raises that exposure to 44.2%.

With the inevitability of New York City casinos, the report recommends that Atlantic City and New Jersey officials accept the threat and plan for it.

“The strongest policy position is not to deny the competitive threat from New York City,” the report reads. “It is to transition the Greater Atlantic City region toward an economically diverse economy. This is not an argument to impede economic change. It is an argument for managing that change before the physical economy breaks.”

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