Bankrupt Trump Plaza Casino Closes in Atlantic City

Long famed as a New Jersey tourism hot-spot, Atlantic City is best known for its vibrant casino nightlife.  But in recent years, Atlantic City’s gambling-fueled economy has fallen on hard times. 2014 in particular has been a difficult year for “AC,” with one casino permanently closing its doors after the next.  Trump Plaza is the latest to fall, leaving many wondering about what’s next for the city’s financial future. Could a recent sports betting directive issued by Gov. Chris Christie be the key to revitalizing a failing economy?  And just how much financial damage have these rapid-fire casino closures inflicted on the city’s workforce?

Atlantic City

Can Chris Christie’s Sports Betting Directive Revive Atlantic City’s Economy?

“Another one bites the dust,” as the song says.

Trump Plaza is the latest to fall in a long line of bankrupt Atlantic City casinos, closing its doors early this morning.  Before Trump, it was the Revel on September 2.  Before the Revel (in fact, just days before) it was the Showboat on August 31.  Before the Showboat, it was the Atlantic Club on January 13.  That brings Atlantic City up to four closures in less than a year.  With three months left to go until 2015, it’s anyone’s guess whether there will be more.

The Christie administration has certainly taken notice of the city’s the sharp decline.  It would be impossible not to, considering the fact that its casino revenue plummeted from over $5 billion in 2006 to less than $3 billion in 2013.  Not only are AC’s casinos taking in an alarming 44% less than they were just eight years ago, the constant closures have also left thousands of people jobless.

In an attempt to stave off economic disaster, last week Gov. Christie issued a directive allowing New Jersey casinos and racetracks to offer sports wagering to patrons without fear of prosecution, provided that no betting on college teams takes place.  It’s a controversial move which has been praised by some and lambasted by others, because sports betting is currently prohibited by federal law.  But the directive takes advantage of a loophole to circumvent this seemingly glaring issue, with supporters arguing that New Jersey isn’t expressly authorizing sports wagering — it’s simply repealing its own former prohibition.

Law professor I. Nelson Rose has been sharply critical of the maneuver, stating,  “I can’t see any state following Christie’s lead on this.  Basically, it is really quite bizarre for a governor to tell the regulated casinos and racetracks, ‘Well, we won’t enforce our anti-gambling laws and you should just go ahead and commit major federal felonies.’  I can’t imagine a federal prosecutor would agree with that interpretation.”

But others have been more supportive, including New Jersey Assembly Speaker Vincent Prieto (D).  In Prieto’s words, “We’ve desperately needed innovative ideas to keep New Jersey’s gaming industry competitive, not only at Atlantic City casinos, but at our racetracks.  This is an opportunity to jump start Atlantic City and the gaming industry and generate new revenue for our state.”

Man Counting Dollar Notes

25% of Atlantic City’s Casino Workforce Now Unemployed

That opportunity certainly couldn’t come at a better time — especially for the thousands of casino workers who have been left jobless over the course of 2014.  The back-to-back shutdowns of the Revel and the Showboat left about 5,000 people unemployed over the span of just a few days, and this morning’s closure of Trump Plaza, brings the number up to about 6,000.  In less than a year, Atlantic City has shed a full quarter of its casino workforce, and one-third of its actual casinos, shrinking from 12 down to eight.

“I don’t think we’ve seen a shrinkage of that magnitude in any industrial sector in New Jersey in that period of time,” says James W. Hughes, the dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers.  “It really is unprecedented.”

In addition to the more obvious problems of unemployment and slashed revenue, the recent string of casino closures creates yet another costly problem for Atlantic City to contend with: repairing the appearance of urban blight.

“If you rely on tourism,” says Israel Posner, who heads a gambling study at Richard Stockton College, “you want bright lights.  All the promotional shots of Las Vegas are at night with the lights on.  Darkness is almost the antithesis of entertainment.”

Amid all these hardships, Mayor Don Guardian has tried to keep his city positive.  “We’ve been down before,” he says, “but we’ve always come back up.”

Hopefully, the recent push toward sports wagering will help Atlantic City make a financial comeback for 2015.

If you or someone you love is struggling with insolvency, an experienced bankruptcy lawyer may be able to help.  For a free and confidential consultation, call Young, Marr & Associates at (609) 755-3115 in New Jersey or (215) 701-6519 in Pennsylvania today.

Have You:

Been paying credit card balances that seem to never go down?

Lost your job and are now having trouble keeping up?

Attempted to work out a payment arrangement to no avail?

Been notified of a mortgage foreclosure action?

Been denied for a mortgage or other line of credit?

If the answer to any of these questions is “yes” then bankruptcy may be an option that you should consider.

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