The winners and losers of casino gambling

As Atlantic City declines, new casinos continue to open in nearby states as hoped-for boons to local budgets

September 16, 2014 9:00AM ET

by Janet Weinstein @Janet_Weinstein

In May 1984, Donald Trump opened his Trump Plaza Hotel and Casino in New Jersey’s glittering gambling capital, Atlantic City, saying it could be the finest building in the nation.

On Tuesday the casino shut its doors, making it the fourth Atlantic City casino to go out of business this year. About 8,000 of the city’s casino workers lost their jobs with the closing of the Plaza, Revel, Showboat and Atlantic Club.

"Who thought it was going to really happen? It's like, 'They're not going to close this big building,' and they closed it," said former Revel employee Monica Hunter.

Now another Trump resort, the Taj Mahal, has filed for bankruptcy and could shut down by November.

Since Atlantic City’s gambling revenues peaked in 2006, its once reliable income source has spiraled downward — a result of more and more casinos opening up in surrounding states.

"With so many casinos in our town and our entire economy only wrapped around casinos, we knew when the bottom hit, we were going to be hit bad," said Atlantic City Mayor Don Guardian. "We just didn't know how bad, and we didn't realize it was going to come all at the same time."

Before, when there weren’t many places to gamble in the U.S., wanting a casino could be seen as politically risky and morally wrong.

Now some politicians and local leaders are looking to casinos as revitalizers and economic engines to boost state revenues.

Naureen Khan

“With so many casinos in our town and our entire economy only wrapped around casinos, we knew when the bottom hit, we were going to be hit bad. We just didn’t know how bad, and we didn’t realize it was going to come all at the same time.”

— Atlantic City Mayor Don Guardian

Before 1988, gambling was legal only in two states — Nevada and New Jerssey— and on some Indian reservations. Today 39 states host casino gambling of some kind, in addition to an explosion of Internet sites.

Because of this new competition, betting meccas across the nation are increasingly feeling the heat. New Jersey’s gambling revenue, for example, fell by $2.1 billion dollars from 2007 to 2013. In Las Vegas, gambling revenue fell by $300 million over the same period.

Gov. Andrew Cuomo of New York sees gaming as key to economic development in areas that are struggling.

"Our casino plan is already generating great interest. We said we believed it would, and it is," he said in his state of the state address. "Our challenge now is to make casinos a reality, make it happen, make it happen fast and make it happen correctly."

There is a high stakes competition right now for rights to build as many as four new full-scale resort casinos within driving distance of New York City.

As the gambling market becomes saturated and more states place bets on casinos to boost their budgets, a phrase like "What happens in the Catskills stays in the Catskills" might not seem that far-fetched.

What larger changes does the precipitous decline of Atlantic City reflect?

How did the laws and attitudes on gambling shift?

What would a well-regulated gambling industry look like?

We consulted a panel of experts for the Inside Story.