New Jersey Governor Chris Christie is holding a summit today to discuss the future of Atlantic City, the seaside gambling destination facing an existential problem: New casinos in New York, Pennsylvania, and elsewhere in the region have given gamblers less reason to travel down the Jersey Shore. After years of falling revenue, the city’s casinos are crapping out. Three casinos have already closed this year, and two more are expected to shutter in the weeks to come.
Those closures will eliminate about 10,000 jobs, one-fifth of the city’s workforce. Thus far, the area’s Main Street businesses have largely weathered the gambling industry’s decline. But the worst is probably still to come for local businesses. While the casinos depend on the flow of gamblers, other businesses in the area—housing contractors, grocery stores, car dealers—depend on people who live there, and 10,000 of them are losing jobs.
Atlantic City’s casino revenue peaked at $5.2 billion (PDF) in 2006, according to the University of Nevada at Las Vegas’s Center for Gaming Research. Last year revenue was $2.9 billion, down 44 percent. Job losses, in the casino business and across the local economy, have been slower to come. The number of jobs in the Atlantic City area had dropped about 10 percent since 2006 before the latest closures, according to government data. The area had a 10 percent (PDF) unemployment rate in July, compared with 6.5 percent nationally.
Small businesses appear to be fairing relatively well, all things considered: The total number of businesses in the area fell 7 percent over the same period. Most of the job losses so far have been limited to the tourism industry.
These aren’t great jobs. The average weekly wage for all industries in the Atlantic City area was 81 percent (PDF) of the national average, according to the U.S. Bureau of Labor Statistics. But as long as the city’s casinos stayed open, they employed enough workers to support the local economy.
Now the casino closures make other businesses’ future uncertain. Analysts at Deutsche Bank (DB) have projected that Atlantic City will have six casinos by 2017, down from 14 in 2012. Now that the casino job losses are hitting en masse, the loss of that income is about to ripple through the rest of the economy. As fewer tourists come to gamble, more casinos close and workers leave the area—leaving fewer people to shop at local stores.