- 1 The World’s Playground (1870-1970)
- 2 Building a Gambling Mecca (1970-1987)
- 3 The Trump Empire (1987-2000)
- 4 Borgata Changes the Game (2000-2010)
- 5 The Crash and Revival (2010 – Present)
The city itself lies on Absecon Island and was formally incorporated on May 1, 1854. With its beachfront location and rail lines servicing the Philadelphia, Pennsylvania area, Atlantic City was a resort town from the outset.
Hotel construction started with the United States Hotel, a 600-room resort spread over 14 acres of prime Atlantic City real estate. The hotel, which boasted a capacity for 2,000 guests, was owned by the railroad and was the biggest in the country at the time.
The first Boardwalk was constructed in 1870 as a means to keep beach sand out of hotel lobbies, and was at that time a temporary, seasonal structure. The early 1900s saw a boom in hotel construction, and by the time the 1920s arrived and the era of Prohibition (1920-1933) came upon the United States, Atlantic City was firmly entrenched as the premier summer resort destination on the East Coast.
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The World’s Playground (1870-1970)
According to The Atlantic City Experience, Prohibition simply didn’t apply in Atlantic City.
“In Atlantic City, Prohibition was essentially unenforced by the local authorities,” the site relates. “Atlantic City was a well-known haven for those seeking alcohol. The tourist-based economy of the resort encouraged business owners to provide whatever was needed to make the visitors happy. The city’s beachfront location and docks allowed rum-runners to bring their goods onto shore. Add in a powerful city boss who allegedly controlled everything from the smuggling operation to the law enforcement to the restaurants where alcohol was served, and Atlantic City was essentially a wide open town, flagrantly violating the federal law.”
Enoch ‘Nucky’ Johnson
That powerful city boss was none other than Enoch L. “Nucky” Johnson, who rose to power during this era, taking over leadership of the Atlantic County Republican Executive committee and gaining control of the Republican-led Atlantic City and Atlantic County governments in the early 1900s.
According to the New York Times obituary [paywall]published at the time of his death in 1968, Johnson made the majority of his $500,000 annual income from kickbacks he took on construction, illegal liquor, prostitution rings operating in the city, and gambling.
Johnson and other city officials were not afraid to speak publicly regarding the local approach to vice, and dubbed Atlantic City “The World’s Playground.”
“We have whiskey, wine, women, song and slot machines,” Johnson is quoted as saying in the NYT obituary. “I won’t deny it and I won’t apologize for it. If the majority of the people didn’t want them they wouldn’t be profitable and they would not exist. The fact that they do exist proves to me that the people want them.”
New Jersey had long held a reputation for being more permissive than other states when it came to gambling. The state ran lotteries to help fund war efforts until they were made illegal in 1844. New Jersey was also home the Freehold Raceway, the oldest racetrack in the United States and one that continued to operate through various legal statuses, including an 1894 decision to ban parimutuel gambling and an 1897 referendum which made all gambling illegal.
Racetrack gambling was legalized again in 1939, but despite the fact gambling was illegal in the state of New Jersey until then, under Johnson’s rule, illegal casino and bookmaking operations, slot machines, and numbers rackets abound in Atlantic City.
Filled with notorious speakeasy establishments, booze and betting, Atlantic City epitomized the Roaring 20s, an image of which has since been immortalized in the 2010 HBO series Boardwalk Empire. Produced by Martin Scorsese and Mark Wahlberg, the series ultimately ran for five seasons and featured acclaimed actor Steve Buscemi starring as a fictionalized character based on Johnson. Resorts Hotel Casino capitalized on the popularity of the series with a renovation into a Roaring 20s theme.
The End of an Era
In 1941, Johnson was convicted and sentenced to ten years in federal prison on tax evasion charges. He was released on parole after four years, and never sought political office again.
After the end of the Second World War, Atlantic City’s popularity as a resort destination waned. The economy declined and the city suffered an increase in poverty and crime. In the 1960s, a number of Atlantic City hotels were shut down and re-purposed as apartment buildings and nursing homes. Several of the City’s landmark hotels were demolished.
However, a plan to legalize gambling and rebuild the once great resort town emerged in the 1970s and Atlantic City suddenly saw itself on the verge of its first great comeback, initially sparked by a 1970 referendum to create the New Jersey Lottery.
Building a Gambling Mecca (1970-1987)
While the state clearly eyed gambling as a path to increased tax revenues, jobs, and tourism, there were some who worried about potential downsides. At the time, Nevada was the only state in America which had legalized gambling, and in a 1974 referendum, more than 60 percent of New Jersey voters voted against joining them.
Opponents of statewide legalized casino gambling worried that mafia organizations would coopt the industry and argued that casinos would bring an increase in crime, corruption and exploitation of the state’s most vulnerable residents.
But despite the failure of the initial referendum, many Atlantic City locals stuck behind the idea that casinos were the answer, and sought to introduce a revised referendum that would legalize gaming inside the borders of Atlantic City only.
Millions were spent on a campaign to save the city through legalized casinos. In 1976, proponents successfully got the measure added to the ballot, and The Press of Atlantic City ran a front-page editorial supporting it as the answer to the city’s economic woes.
The revised referendum passed in November 1976, although according to the Atlantic City Free Public Library, it was approved by a slim margin of just 1.5 million votes to 1.14 million.
In 1978, Resorts Atlantic City, which still operates from the same Boardwalk location to this day, became the first legalized Atlantic City casino to open to the public.
By the close of the 1970s, Caesar’s Boardwalk Regency, which would later become Caesar’s Atlantic City, and Bally’s Park Place, which would later become Bally’s Atlantic City, had opened their doors as well.
Casino Construction Boom
With gambling now legal, the 1980s saw a huge boom in casino construction which forever changed the face of AC.
The Brighton, which would eventually become the Sands Hotel and Casino, opened up in 1980, followed by the Harrah’s Casino Hotel and the Golden Nugget at Boston Avenue, which underwent a number of name changes before eventually becoming the Atlantic Club Casino Hotel.
In 1981, Del Webb’s Claridge and Hi-Ho Casino opened up, and eventually became part of a merger to form Bally’s. The Playboy Hotel & Casino, which would later be known as the Atlantis, the Trump Regency and finally Trump’s World Fair, also opened up, as did the Tropicana Casino and Resort, which became TropWorld, and is now Tropicana.
In 1984, the Harrah’s Boardwalk Hotel Casino at Trump Plaza opened its doors. It would later become the Trump Plaza Hotel and Casino. A little over a year later, Trump Castle, which became the Trump Marina Hotel and Casino and later the Golden Nugget in the Marina District, began operations.
The Showboat Casino Hotel opened up 1987, with the Trump Taj Mahal Casino Resort opening in April of 1990. The launch of the latter property would bring the construction boom years of the 80s to a close.
With casino construction flourishing, it was clear that visitors were once again flocking to Atlantic City to gamble. But while gaming revenue soared, some studies suggested that legalized casino gambling did little to stop the increase in crime and poverty in Atlantic City. Tourism, however, was up drastically during that period.
The Trump Empire (1987-2000)
While the city lagged a bit behind Las Vegas as the top gambling resort destination in the country, Donald Trump would bring plenty of glitz and glamour to the market in an attempt to compete.
His properties and others began hosting a-list entertainers, with Trump himself promoting major boxing matches in the city. This brought tourism back to AC, and crucially, tourists willing to wager.
In fact, according to a 1989 report [paywall]by Time Magazine, Atlantic City casinos boasted revenues of $2.73 billion in 1988. According to the UNLV Center for Gaming Research, gaming revenues on the Las Vegas Strip reached just $1.944 billion that same year.
Atlantic City was back on the map, and as the 1980’s came to a close, the future of the city and its casinos seemed as bright as it could be.
Trump certainly must have felt that way. Construction of the Trump Taj Mahal Casino Resort was finishing up at a cost of close to $1 billion and the local casino industry was beginning to look like his own personal empire.
By 1990, Trump owned three of Atlantic City’s 12 casino properties and business was booming. His properties included Trump Castle, Trump Plaza, and the newly constructed Trump Taj Mahal, which reportedly cost close to $1 billion to build and opened as the tallest building in New Jersey and the biggest casino in the world at the time.
According to the New Jersey Casino Control Commission Annual Report, casino revenues in the city rose steadily throughout the 1990s, from $2.95 billion in 1990, to $4.2 billion in the year 2000, crossing the $4 billion mark for the first time in 1998. Trump was at the forefront of the steady revenue growth, but his career as a casino mogul was much more of a roller coaster ride.
According to nj.com, Trump had been buying up land near the end of the Atlantic City Expressway to build a casino, acquiring his first license to do so in 1982. Two years later, the $210 million 39-story Harrah’s at Trump Plaza opened up as the biggest casino in Atlantic City history. It was a joint partnership between Trump and Holiday Inn, but not for long.
In 1985, construction was almost complete on Hilton’s nearby $320 million marina casino project. However, Hilton was denied a casino license. Trump swooped in, bought it up and finished construction, opening up Trump Castle in June of that year.
Trump’s Plaza partner, Holiday Inn, protested his involvement in both casinos, filing a lawsuit against him. Within a year, Trump bought its share of the property for $223 million and renamed it Trump Plaza.
Trump promoted his casinos like no other. He helped bring four Mike Tyson title fights to Atlantic City, and at the height of the World Wrestling Federation’s popularity in the United States, helped bring its epic WrestleMania event to the city in back-to-back years. This brought an increase in tourism, and in turn, casino revenues.
Trumps two casinos were among the local industry’s revenue leaders throughout the rest of the 1980s, with Trump Plaza rising to the top, boasting revenues of $305 million in 1989.
As the 1980’s were coming to a close, Trump turned his attention to adding a third casino property to his growing empire. He made a failed play at Bally’s before finally finding what he was looking for in the city’s first legal casino, Resorts.
Resorts International had already sunk almost $500 million into construction of the Taj Mahal next door when the company reportedly ran out of money. The plan was to build the world’s biggest casino and construction was nowhere near complete when Trump swooped in and bought a controlling interest in the company.
Donald Trump vs Merv Griffin
What followed was a very public war between Trump and TV host Merv Griffin for control of the company. The two settled in 1998 with Griffin ultimately taking over the company, but selling the Taj Mahal to Trump the next day for $273 million.
According to various news reports at the time, Trump raised $675 million to pay for the purchase and complete construction through the sale of high-interest junk bonds.
Trump finished construction, and his third Atlantic City casino, Trump Taj Mahal, opened in 1990 to much fanfare. Michael Jackson showed up for the opening and the casino reportedly brought in a whopping $2 million in revenue on opening day. It was billed the eighth wonder of the world and claimed the title of the largest casino on the globe, but the hype wouldn’t last.
Within 15 months, the Trump Taj Mahal was deeply in debt, construction contractors were claiming they were still owed millions and the property filed for Chapter 11 bankruptcy. In the aftermath, Trump was forced to sell a number of personal assets and lost half of his interest in the property to bond owners. But this was just the beginning of his Atlantic City downfall.
A year later, Trump Plaza and Trump Castle both filed for Chapter 11 as well. In 1995, Trump’s three casinos were consolidated into a publicly traded company called Trump Hotels & Casino Resorts.
In the meantime, Trump did manage to get his hands on a fourth Atlantic City casino property. The Playboy Hotel and Casino opened in 1981 before changing its name to Atlantis Hotel and Casino three years later. By 1985, the casino filed for bankruptcy and four years later, Trump bought it for $63 million, renaming it the Trump Regency.
Mortgage holder Chemical Bank took ownership in 1992, but Trump bought it back for $60 million in 1995. In 1996, Trump reopened the property as Trump World’s Fair at Trump Plaza Hotel and Casino. Three years later, it was closed for good.
In 1996, Trump said he was going to park a 430-foot yacht next to Trump Castle and open a casino inside, but the project never came to fruition. In 1997, Trump Castle was renamed Trump Marina.
By 2004, Trump Hotels & Casino Resorts had filed for Chapter 11 and the name of the company was changed to Trump Entertainment Resorts. Within five years, Trump Entertainment Resorts also filed for Chapter 11. Trump resigned as chairman, and although he retained ten percent of the company, and the casinos continued to bear his name, for all intents and purposes, Trump’s reign over the Atlantic City casino industry was over.
In 2011, Trump Marina was sold and reopened as the Golden Nugget, and in 2014, with Trump completely divested, Trump Entertainment Resorts once again filed for Chapter 11. Trump Plaza closed later that year, and although Trump Taj Mahal stayed open under new owner Carl Icahn, it ultimately shut its doors for good in October 2016.
Despite Trump’s tumultuous time in Atlantic City, casino revenues continued to rise throughout his reign, peaking in the mid-2000s.
Borgata Changes the Game (2000-2010)
According to the 2000 New Jersey Casino Control Commission Annual Report, gaming revenues from the city’s 12 casinos hit $4.2 billion dollars that year. The numbers hovered around that mark in 2001 and reached $4.38 billion in 2002, with close to 75 percent of all the city’s gaming revenues coming from slot machines. The Trump Taj Mahal, with its 4,700 slots, led the way.
But things were about to change drastically when a new contender for the Taj’s crown suddenly emerged.
The Taj Mahal debuted in 1990, but by the latter part of the decade, most Atlantic City casinos began to look dated. It was then that that casino mogul Steve Wynn announced plans to build a brand-new modern casino property in the marina area. The project, however, hinged on whether the government would go ahead with its plan to construct a tunnel from the Atlantic City Expressway which would surface near the planned property.
Some residents opposed it, and since the original plan did not include an exit in front of Trump Marina, Trump tried to block it. Ultimately, an exit to Trump Marina was added to the plan and the Atlantic City-Brigantine Connector was built.
Bringing Las Vegas-Style Action to AC
Wynn was later bought out by what became the MGM Mirage Company, which partnered with Boyd Gaming to build and open the Borgata Hotel Casino & Spa in July of 2003. It was really the first Las Vegas-style hotel and casino in Atlantic City, and while competitors seemed keen on creating floor space to jam in as many slot machines they could, Borgata opened up with 200 table games and a 34-table poker room. What’s more, the casino boasted a chic nightlife scene and restaurant options the likes of which Atlantic City had not seen before.
The game of poker boomed around that same time, exploding after amateur player Chris Moneymaker won the 2003 World Series of Poker Main Event. Borgata was at the forefront of all of that as well, hosting a number of televised World Poker Tour events, expanding its poker room to 85 tables, and positioning itself as the premier poker destination on the East Coast within a few years of opening.
Borgata Emerges As Industry Leader
Borgata was a game changer, and while the Taj Mahal was still the city’s revenue leader the year the MGM-Boyd Gaming hotel opened, both Borgata and Bally’s Atlantic City would surpass it in 2004. Both casinos boasted over $600 million in gaming revenues that year.
In 2005, Borgata’s take grew to just under $700 million, putting it in the top spot on the list, a place from which it hasn’t yet budged.
Atlantic City PeaksIn 2006, the Sands closed its doors, but Atlantic City’s gaming revenues continue to boom, reaching an all-time high of $5.2 billion that year.
Yet 2006 marked the peak of ACs gaming revenues during the first decade of the new millennia, which would usher in a new era of falling profits.
Borgata held firm, but the total gaming revenues for what was now all 11 of Atlantis City’s casinos dropped back down to $4.8 million in 2007. In 2008 they landed at just under $4.5 billion and by 2009, they were back under the $4 billion mark.
In fact, a UNLV Center for Gaming Research report from January 2016 claims Atlantic City casino revenues have now fallen by more than 50 percent since the 2006 peak, although they have since rebounded slightly.
The Crash and Revival (2010 – Present)
Atlantic City’s casino industry entered the second decade of the new millennium on a downswing, with gambling revenue in a continual decline.
Borgata was the industry leader and lone bright spot in the market, but other less competitive properties were forced to close their doors.
Competition and Closures
Regional casinos in neighboring states were spreading like wildfire and drawing players who could now gamble in their own backyards as opposed to making the trip to Atlantic City. In fact, in 2014 one-third of Atlantic City’s existing boardwalk casinos were shut down.
It started with Atlantic Club Casino Hotel at the south end of the boardwalk. The property formerly known as the Golden Nugget, Bally’s Grand, Atlantic City Hilton and ACH, permanently closed on January 13. Redevelopment plans have included turning it into an indoor water park and convention center.
The Showboat Atlantic City had changed ownership a handful of times, but was still considered a profitable property when Caesars Entertainment decided to shut it down in the summer of 2014. According to The Press of Atlantic City, Caesars closed Showboat to stabilize its other casino businesses across the city. The hotel was reopened in July 2016 without a casino on site.
Trump’s first Atlantic City casino, Trump Plaza Hotel and Casino, also closed after 30 years of operation. In August 2014, Trump reportedly filed a lawsuit to take his name off the property, since he was no longer involved or invested, but a search for new ownership turned up empty and Trump Plaza shut down in September, rendering the suit moot.
Revel Casino’s Rise and Fall
Considering Borgata’s success in opening its Las Vegas-style resort and casino, Morgan Stanley and development group Revel Entertainment made plans in 2006 to build an even bigger and more opulent resort and casino on the boardwalk, across from the Showboat.
In April 2007 construction of the Revel Casino began, and by August the group revealed it was going to be a $2 billion casino hotel with two 700-foot towers, including 4,000 rooms and 150,000-square feet of gaming space. The plan was to open in 2010.
Within a year, plans were scaled back to include only one tower. A year after that, construction workers were getting laid off with the project still unfinished. The opening was put off until 2011 and a lengthy fight to keep the project afloat ensued with developers seeking funding and lawmakers considering a number of tax breaks just to get it finished.
Eventually, the funding came through, and despite Morgan Stanley dropping out, construction resumed in 2011. In April 2012 Revel opened. When all was said and done it reportedly cost $2.4 billion to build. Within a year, however, the property was over $1 billion in debt and filed for bankruptcy. The organization was restructured and the property was renamed Revel Casino-Hotel. It even posted a monthly profit at one point, but it wasn’t enough and Revel declared bankruptcy for a second time.
Revel closed in September 2014, a little over two years since it opened. Developer Glenn Straub came in to purchase the property later that month and has since changed the name to TEN. The plan was to reopen the facility sometime in the first quarter of 2017, but that never came to fruition. In October 2017, there was speculation that the property was again sold, but Straub denies it.
Two years after Revel shut its doors, Trump Taj Mahal did the same. Embroiled in a lengthy labor dispute, new owner Icahn Enterprises decided in October 2016 that shutting down was the only option.
That left just seven Atlantic City casinos still operating, including Bally’s Atlantic City, Borgata Hotel Casino & Spa, Caesars Atlantic City, Golden Nugget Hotel Casino, Harrah’s Resort Atlantic City, Resorts Casino Hotel, and Tropicana Casino And Resort.
The future is looking bright(er)
On-site gaming revenues are still in decline, but thanks to the addition of online gaming, Atlantic City’s casino industry saw its first revenue increase in a decade in 2016.
Not only that, but the consolidation of the market has sparked an increase in individual casino revenues.
As to whether Atlantic City has truly entered a period of revitalization, the answer will become clearer when Hard Rock Casino opens its doors in summer 2018. The casino will occupy the old Taj Mahal space, and is currently undergoing $375 million worth of expansions.
Online Gambling Comes to New Jersey
In December 2012, New Jersey passed a law legalizing online gambling operations for Atlantic City casinos and players inside the borders of the state. Borgata Hotel Casino & Spa, Caesars Atlantic City, Golden Nugget Hotel Casino, Resorts Casino Hotel, and Tropicana Casino and Resort now run twenty different online casinos and poker sites.
According to The New Jersey Division of Gaming Enforcement, after ten years in decline, total Atlantic City casino revenues hit $2.603 billion in 2016, an increase of 1.5 percent. Brick and mortar casinos actually earned $2.406 billion in 2016, down 0.3 percent from $2.414 billion in 2015, but revenues from internet gaming saw a 32 percent increase from 2015, reaching $196.7 million and turning the industry around.
For 2017, NJ online gambling is on pace to generate over $250 million in revenue, a year-on-year increase of over 27%.