Mixed blessings First Atlantic City casino opened 25 years ago

ATLANTIC CITY, N.J. – When New Jersey voters approved gambling in hopes of saving a dying Atlantic City, it was a roll of the dice: They were betting on a mob-tainted business that had never before been used to revitalize a city.

Twenty-five years to the month after the first casino opened its doors, Atlantic City is booming and New Jersey is being hailed for making gambling more respectable. More than 25 states now have some form of casino gambling.

But Atlantic City is no Monte Carlo. There are still ugly parts of town, unemployment is more than twice the state average, and critics blame casinos for compulsive gambling and bankruptcies.

“We’re a little like that inkblot test you took in college,” said James Whelan, a former mayor. “Some look at us and see a butterfly, some look at us and see a cockroach.”

And after enjoying an East Coast monopoly on casino gambling for more than 15 years, Atlantic City faces competition. The Foxwoods and Mohegan Sun resorts in Connecticut and slot machines at Delaware racetracks have taken business from Atlantic City’s $4.2 billion industry.

“Atlantic City becomes a victim of its own success only if it fails to keep pace,” said Steven Perskie, a former lawmaker who helped persuade New Jersey voters to approve casinos in 1976.

Back then, the only casinos in the United States were in Nevada, and no city had ever attempted to use gambling as an economic development tool. But Atlantic City was a shabby seaside resort, hurt by a decline in air travel and the popularity of backyard pools and air conditioning.

A group of businessmen decided in 1974 that casino gambling could stop the decades-long slide. They told voters casinos would mean jobs, tax revenue and new life for the city of Miss America and saltwater taffy. Voters finally agreed.

The casino era began on May 26, 1978, when the Haddon Hall hotel reopened as Resorts International Hotel Casino and singer Steve Lawrence threw the first dice. Resorts International took in $100,000 from the slot machines the first day. Employees had to stuff the bills into bags until they could be counted.

“It’s here,” The Press of Atlantic City newspaper reported the next day. “The wheels are spinning and the dice are rolling and the coins are clinking and the grand old dame Atlantic City has a saucy swivel in her hips she never had before. The city will never be the same again.”

Since then, casinos have rejuvenated the Boardwalk, pumped $7 billion in capital investment into the city, created more than 45,000 jobs and generated millions of dollars in related business, from linen companies, food vendors and the like.

Buses packed with gamblers stream into town by the hundreds, bound for 11 neon-trimmed casino hotels (a 12th is on the way). There is a new high school, a new police station, a minor-league baseball stadium and 1,500 units of new housing – all built with the help of casino taxes.

Those taxes also help pay for a prescription drug program for New Jersey senior citizens, low-income housing, day care centers, a performing arts center in Newark and a Vietnam Veterans memorial in Holmdel.

But the casinos are self-contained pleasure palaces, making it unnecessary for visitors to venture outside and patronize local businesses. Away from the Boardwalk, redevelopment has lagged, leaving some neighborhoods with shabby rowhouses and glass-strewn lots. Unemployment last year averaged 11.4 percent, well above the state average of 5.4 percent.

The Monte Carlo-style elegance has proved elusive. Slot machines – which voters were promised would not be permitted – now make up nearly 70 percent of the casinos’ business. While Atlantic City gets high rollers, its bread-and-butter is senior citizens who often arrive by bus from community centers with box lunches and rolls of coins for the slot machines.

And even though New Jersey has been able to keep casinos free of mob taint, crime increased, just as opponents predicted.

The number of purse snatchings, assaults, rapes, robberies and murders skyrocketed after the casinos opened. FBI statistics show the crime rate per 1,000 residents went from 134.3 in 1978 to a peak of 450.3 in 1988.

Some observers will not call Atlantic City’s casino gambling a success or a failure, saying it is more complicated than that.

“Is Atlantic City 25 years later a shining city on the hill, with no economic problems and no social strains? Of course not,” Perskie said. “Gambling was not a 100 percent cure-all. But if the question is ‘Was it an efficient and effective tool of economic redevelopment and is it responsible for the continued existence – much less the flourishing – of the city?’ the answer is categorically yes.”