When Resorts Casino Hotel opened in Atlantic City in 1978, it became the first-ever US casino to open outside of the state of Nevada. A landmark moment in a state which only four years previous had voted against the legalization of casino gambling, this would be the start of the development of a huge gambling district in the city, going on to establish itself as the “Las Vegas of the East Coast.” The cultural and economic impact the gambling industry has had on Atlantic City and the rest of New Jersey has been profound, transforming a once-forgotten coastal town to the premier entertainment destination for over
27 million visitors every year. Starting from such humble beginnings, how has gambling changed this small Northeastern state?
Early Days
Up to 1939, all forms of gambling were prohibited in the state of New Jersey. However, as the century progressed, various gambling activities slowly began to be approved by lawmakers. Racetrack gambling was legalized in 1939, while 1953 saw the approval of bingos and raffles for non-profit organizations. The New Jersey Lottery, established in 1975, then became the first legal lottery in the United States. The big move, however, came in 1978 following the approval of casino gambling in Atlantic City, and the resultant development of the first casinos in the state. After years of economic downturn and a suffering tourism sector, the establishment of a casino industry was seen as an effort to revitalize a once booming holiday destination, bringing in swathes of tourists and creating jobs for residents.
Expansion and Global Recognition
Following on from the legalization of casinos in the state, Atlantic City witnessed a huge boom during the 1980s which saw a rapid expansion of the Boardwalk district with multiple new casinos opening. Famous establishments such as Harrah’s Casino Hotel and Tropicana Casino and Resort opened in 1980 and 1981 while several premier destinations were unveiled by none other than American businessman,
Donald Trump. In many ways, Trump emerged as the dominant force in the New Jersey gambling scene, helping to establish the city’s reputation on the global stage through a combination of his casino empire and by bringing some of the biggest boxing matches of the era to the East Coast. By the end of the decade, thousands of new jobs had been created while investment in infrastructure had revitalized the city and surrounding areas. Atlantic City had become one of the most popular tourist destinations in the United States.
Challenges and Competition
Following the Indian Gaming Regulatory Act of 1988 and the resultant expansion of Native American casinos, the gambling landscape on the Northeast Coast shifted dramatically. The monopoly on gambling activities that New Jersey once held in the region fell away with neighboring states Connecticut and later Pennsylvania establishing casinos of their own. This increased competition significantly affected customer numbers in Atlantic City casinos while also eroding the sense of exclusivity that the gambling center once held. Furthermore, cracks in the luxurious facades of the Boardwalk casinos soon began to show some unstable foundations. Reliant on continued growth, many of the largest casinos operated on loan payments and debt, which once customer numbers started to fall, began to have huge impacts on the sustainability of the industry. By 2004, Donald Trump’s three largest casinos had filed for bankruptcy and closed.
Emergence of Online Gambling
While the socioeconomic impact of the downturn in Atlantic City’s fortunes in the 1990s was apparent, the emergence of online gambling in the following decade further fueled the decline of the once-booming city. When the New Jersey Legislature officially legalized online gambling in 2013, New Jerseyans could
play games for real money from the comfort of their own home, no longer drawn to the glitz and glamour of the Atlantic City Boardwalk. One of the first states in the US to legalize online gambling platforms, the iGaming industry soon started to show signs of success, surpassing $100 million dollars in tax revenue in 2017. The story in New Jersey highlighted the global gambling transformation that was taking place with many of the struggling land-based casinos setting up their own online platforms to maintain strong customer bases and generate revenue. While the Boardwalk continued to decline, the New Jersey gambling industry remained strong.
Legalization of Sports Betting
The landmark
PASPA supreme court ruling in 2018 then opened up another lucrative gambling market - sports betting. Before then, sports betting activities had been limited to the state of Nevada. Following the ruling, sports betting practices were legalized across the country, with New Jersey quickly moving to regulate its own industry. The impact of this ruling has been profound for the state’s gambling industry with New Jersey established as the state with the biggest betting handle while being home to the second most online sportsbooks in the country. New Jersey’s early adoption of iGaming has enabled it to maintain a competitive edge over other states, able to attract significant investments from leading betting companies which has ultimately led to economic growth.
New Jersey has experienced many ups and downs in its prestigious gambling history. The golden era of Atlantic City’s Boardwalk casinos is seen by many as the height of the state's gambling success however upon further inspection, the full picture becomes clearer. It is certain that the glamour of the 80s era Atlantic City established New Jersey as a global gambling destination and without it the success of the state's iGaming industry might not have been quite so impressive. However, New Jersey has continued to be at the forefront of the gambling landscape as it continues its rapid evolution. As gambling has shifted more and more to online environments, New Jersey has shifted with it, enabling it to continue to lead the way not just in online gambling revenues, but in defining suitable regulations that maintain a responsible gambling environment with consumer protections at the core.
By Chris Bates
