ATLANTIC CITY–Americans who think more legalized gambling can ease their state and local tax burdens should take a close look at the travails of this struggling New Jersey seaside resort.
Because betting is now legal in neighboring states, gambling here is way down. The casino hotels have slashed their workforces, cut real wages and, citing falling property values, received huge property tax refunds — with more refunds likely.
The city has sold $103 million of bonds to finance casino property tax refunds, bonds that with interest will cost the average homeowner more than $2,100 over the next two decades, Michael Stinson, the city finance director, said.
The city is about to sell another $35 million in bonds, while the Press of Atlantic City reports that $40 million more may have to be borrowed next year. If all that happens the average homeowner eventually may be out more than $3,600 in added taxes.
That may well understate the added costs to local taxpayers in the next few years as the gambling business is likely to shrink even more, as Mayor Lorenzo Langford told me. Each time another casino opens in nearby states, “the Atlantic City market should expect to see some lost business,” Mayor Langford said, and “one or more of the weaker casinos may close.”
Two temples of chance are gone already. The Sands was swept away in 2006 by the winds of change, while another casino once named the Atlantis sank, like its mythic namesake, beneath a sea of red ink in 1999.
“Atlantic City is in trouble, and I don’t see any way out, even if they get sports betting and Internet” gambling, I. Nelson Rose, the Whittier College of Law gambling expert, told me.
Everyone I spoke to during four visits this summer expects a big casino in the New Jersey Meadowlands in a few years, which I believe would add to pressure to bring casinos to Manhattan. Both are historically big markets for Atlantic City.
Gamblers lost $3.3 billion in Atlantic City last year, down 39 percent from the more than $5.4 billion (in 2011 dollars) that players lost in 1996, according to the Center for Gaming Research at the University of Nevada, Las Vegas.
Because it has a national convention business, Las Vegas has fared better than Atlantic City. Player losses in Las Vegas grew 8 percent in real terms between 1996 and 2011, the center says.Click here for reuse options!
Copyright 2012 The National Memo