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Atlantic City's Economic Slowdown

Is Atlantic City Feeling The Pressures Of The Slowing Economy? The resurrection of Atlantic City began twenty years ago as a result of casino gambling but it has been a slow process to date. On account of ever increasing competition, the city’s future is uncertain with the possibility of growth stagnation or a total decline, the latter being one of the main reasons that made Atlantic City turn to gambling in the first place. The surge in both casino and urban development has pumped billions of dollars into New Jersey’s economy, producing more tax revenue and at the same time creating more jobs than there are residents in the city. Nevertheless, the casino industry has not restored the city to its former glory as the playground of the world or one of the major hospitality centers in spite of this being anticipated in the Casino Control Act. Let us take a closer look at some of the reasons that this is happening and whether this is a short term or a long-term trend.

Atlantic City has reaped relatively limited benefit from its casinos, in spite of them contributing almost seventy percent of the tax levy. The Atlantic City casinos ollectively employ about forty thousand people whose wages are lower than the national average. The casinos of Atlantic City, besides providing much-needed resources for the redevelopment of the city, have also created thousands of moderate-income jobs all the year round as a result of their catering to millions of tourists per year. The state of New Jersey, has received many tax benefits on account of the casino revenues, with the revenue from entertainment and the gambling related taxes in Atlantic City being next only to that of Las Vegas. How is it that an economy with such a strong cashflow is not doing well?

Amongst the many reasons that could be causing this, political errors and the overall economic slowdown are perhaps the biggest ones. On account of disputes between tlantic City, Atlantic County and the state of New Jersey, conditions like poor infrastructure and social degeneration of the community continued until the last five years. Due to the New Jersey Casino control act, two percent of the gross revenue from casino operations was to be rendered to the state of New Jersey for redevelopment work within Atlantic City. Although, under this act, the funds got allotted for urban development in New Jersey with almost no benefit to Atlantic City itself. The state came to an erroneous decision that the investment in Atlantic City by casinos and hotels would be enough to stimulate rowth in the community. The surmise of the state was that the infrastructure as well as the need for city housing would accelerate on account of the growth of the casino industry. This flawed assumption as well as the condition of the national economy, currently reeling under the mortgage crisis, could well be the main reason as to why there is a slowdown in Atlantic City.

While, in contrast, other state and local governments have not hesitated to spend millions so as to attract new jobs and talents into their respective economies. For example, the State of New York had recently authorized about six tribal casinos as well as slot machine gaming at the eight racetracks. Such a move by the New York State was no doubt related to the need to curtail the ever-burgeoning state deficit, something that had acerbated of late, on account of fiscal slowdown and the economic fallout of the war on terrorism. The actions by the terrorists have also had a pejorative effect on New York’s economy as well. Such circumstances only serve to emphasize that casino development can still be a good thing for the economy as long as it is done properly.

In the last three months about 500 casino employees have been ‘let go’ in Atlantic City alone as well as other leading game jurisdictions. Of late, peripheral businesses for casinos - their hotels, shows etc are all trending a fast decline and so are the gaming evenues as well. Will Atlantic City manage to overcome this and come out on the top in the long run or is this the beginning of the end for this city? Only time will tell.

Article Source: http://www.outleted.com

David Kaleky owns and operates the leading site about Atlantic City Hotels and Atlantic City Shows . Check out his blog at www.atlanticcity.com/blog"> Atlantic City Blog

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