Atlantic City's Losing Streak - 8/4/14
Atlantic City, New Jersey is on a losing streak. Recently, Moody’s Investor’s Service cut the City’s credit rating by two levels. Atlantic City’s bonds are now rated at junk status. The city’s tax base has been significantly reduced largely due to the fact that it has lost its regional casino monopoly. States including Maryland, Pennsylvania and New York have either legalized casinos or expanded betting to expand tax revenue.
According to Bloomberg, Atlantic City’s 11 gambling houses account for nearly half of its jobs, 5900 positions in a workforce totaling 13,500. The Atlantic Club closed in January, putting 1,600 people out of work. The closing of Caesar’s Showboat casino is scheduled for later this month, and will wipe out more than 2,100 jobs. Trump Plaza and Casino has announced intentions to close on September 16th, reducing the city’s job count by another thousand.
The city is now working on plans to diversify its economy and attract more tourists who are not interested in gaming. Atlantic City’s experience may serve as a cautionary tale to other communities that depend upon gaming for economic activity and for revenues. Casinos can open and they can close.