Gaming

[Vegas on My Mind]

Growing in some places and crumbling in others, is gaming still a sure bet?

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Crapped out: Atlantic City’s Revel closed after only two years, but it’s hardly the only victim of a recent wave of similar closures.
Photo: Mel Evans / AP

Later this month, the top figures in America’s gambling industry will offer up their thoughts to an enthusiastic audience of casino bosses and analysts at the annual Global Gaming Expo. Odds are good they will talk about how casinos are thriving, about how many thousands of men and women they put to work, about the aims to spread the Las Vegas vibe across Asia and into Europe to make them all even filthier rich.

It will likely be an upbeat gloss, because that’s what these folks do. Even in the doldrums of the Great Recession, they sought silver linings.

Except when G2E rolls in this year, those same folks will have a lot weighing on their minds. Atlantic City, perpetually on the brink of disaster almost since its first craps roll, saw the closure of at least four of its casino-resorts this year in a domino-fall of epic proportions. They include the Atlantic Club, Showboat and the gleaming, 2-year-old Revel, destined to be best known as the place where now-former Baltimore Ravens running back Ray Rice punched out and dragged around his now-wife. This week, the Trump Plaza also closed, and the owners of the Trump Taj Mahal have warned the state’s gaming regulators that it may be the fifth to shut down before 2015.

Many want to shrug off Atlantic City’s woes as the unique result of a flailing market battered by awful weather and terrible business decisions amid an onslaught of competition in Pennsylvania, Connecticut and Maryland. New Jersey Gov. Chris Christie issued an executive order permitting casinos and racetracks to take sports bets—just to give Atlantic City some sort of competitive advantage because, heretofore, only Nevada allowed that. He vetoed a bill that would have repealed the sports betting ban last month, so his sudden fiat was as surprising as it was desperate.

Unfortunately, Atlantic City’s spectacular economic (and, perhaps soon, physical) implosions come in a punishing wave at exactly the wrong time and put a major crimp in the argument that casino construction and operations are terrific for local economies.

As it happens, Massachusetts voters will be asked in November to repeal that state’s casino law and halt whatever casino development is in progress. Polling shows it’s close. But casinos have a track record of vastly outspending anti-gambling forces in Massachusetts and losing anyway. And right about now, the idea that casinos equal employment is in question in a way it hasn’t been for decades.

“We cannot ignore the news,” urges the Yes On [Question] 3 website next to a photo of the glassy, curvaceous exterior of now-closed Revel. “Casinos are laying off thousands around the country—in Atlantic City alone more than 8,000 workers will be laid off by the end of the year. Casinos are shuttering their doors, it’s an oversaturated market. The empty promises of casino backers have not panned out anywhere else.” Actually, if the Taj shuts down, it’ll be more like 10,500 lost jobs.

We had to know this day would come. When gambling was a rare activity in America, adding casinos to Indian reservations and sad-sack spots like Bethlehem, Pennsylvania, or Gary, Indiana, made sense and lots of money. While it’s safe to assume that gaming companies like Wynn and MGM Resorts do studies that show there’s still some room for expansion left as they aim for Massachusetts berths, the good people of the Bay State have a legitimate reason to wonder. Someone studied the Atlantic City market, too, and decided to build Revel.

Plus, Atlantic City isn’t the only place casinos are in distress. Harrah’s Tunica, the largest casino in Mississippi, shut down in June. Missouri Gov. Jay Nixon earlier this year blamed a budget shortfall on a “steep decline” in gambling revenues. Regulators in Cedar Rapids, Iowa, decided not to permit another casino out of fear of the impact on existing properties. Congress learned in July from Kevin Washburn, Interior Department assistant secretary for Indian Affairs, that tribal revenues have been “pretty flat since 2007. The days of tremendous growth are probably behind us for Indian gaming.”

Even those who don’t buy the alarmist view that casinos cause an uptick in various unwanted social ills can understand why Massachusetts voters would be skittish. All of a sudden, gambling, once a bona fide sure bet that revived many locales and has filled countless tax coffers, is looking seriously risky. Let’s see if the folks at G2E understand that or, like so many suckers they cater to, if they think one more bet will turn it all around.

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