Search Blog Posts

Sunday, December 22, 2013

The next Detroit? Atlantic City and Las Vegas facing catastrophic collapse

Hard to imagine any cities nicer than these people for it to happen to. Unless…caught ya… had Manhattan and Frisco in mind didn’t you! Shame.

Posted: Dec 21, 2013 5:04 PM EST Updated: Dec 22, 2013 11:27 AM EST
By Israel Joffe, Web Producer -
AP file photo/Mel Evans
NEW YORK (MYFOXNY) - With the closure of the recent Atlantic Club Casino Hotel, rumors of the bankrupt Revel being sold to Hard Rock, Las Vegas real estate prices remaining depressed, casinos opening up all around the country and online gambling legislation underway in various states, it seems as if the reasons for the very existence of Atlantic City and Las Vegas are in serious jeopardy.

Beginning in the late 1940s, Las Vegas became known as the 'adult playground of the world.' Celebrities knew they made the big time when their names graced the billboards of ‘Sin City.’ Gamblers hoping to make money would flock there all year and families looking for a nice getaway would enjoy relaxing by the extravagant swimming pools under the hot desert sun, seeing the various shows and concerts, and whenever possible, sneaking away to the blackjack tables while their kids slept.

It was paradise.

On the other hand, Atlantic City, once a major vacation spot during the roaring 20s and 1930s, as seen on HBOs Boardwalk Empire, collapsed when cheap air fare became the norm and people had no reason to head to the many beach town resorts on the East Coast. Within a few decades, the city, known for being an ‘oasis of sin’ during the prohibition era, fell into serious decline and dilapidation.

New Jersey officials felt the only way to bring Atlantic City back from the brink of disaster would be to legalize gambling. Atlantic City’s first casino, Resorts, first opened its doors in 1978. People stood shoulder to shoulder, packed into the hotel as gambling officially made its way to the East Coast. Folks in the East Coast didn't have to make a special trip all the way to Vegas in order to enjoy some craps, slots, roulette and more.

As time wore on, Atlantic City and Las Vegas became the premier gambling spots in the country. While detractors felt that the area still remained poor and dilapidated, officials were quick to point out that the casinos didn't bring the mass gentrification to Atlantic City as much as they hoped but the billions of dollars in revenue and thousands of jobs for the surrounding communities was well worth it.

While Atlantic City developed a reputation as more of a short-stay ‘day-cation’ type of place, it managed to stand firm against the 'adult playground' and 'entertainment capital of the world' Las Vegas.

Through-out the 1980s and 1990s, these two places would become an integral part of American pop culture as the place to gamble and have fun no matter which coast you lived at.

However in the late 1980s, a landmark ruling considered Native-American reservations to be sovereign entities not bound by state law. It was the first potential threat to the iron grip Atlantic City and Vegas had on the gambling and entertainment industry.

Huge 'mega casinos' were built on reservations that rivaled Atlantic City and Vegas. In turn, Vegas built even more impressive casinos.

Atlantic City, in an attempt to make the city more appealing to the ‘big whale’ millionaire and billionaire gamblers, and in effort to move away from its ‘seedy’ reputation, built the luxurious Borgata casino in 2003. Harrah’s created a billion dollar extension and other casinos in the area went through serious renovations and re-branded themselves.

It seemed as if the bite that the Native American casinos took out of AC and Vegas’ profits was negligible and that the dominance of those two cities in the world of gambling would remain unchallenged.

Then Macau, formally a colony of Portugal, was handed back to the Chinese in 1999. The gambling industry there had been operated under a government-issued monopoly license by Stanley Ho's Sociedade de Turismo e Diversões de Macau. The monopoly was ended in 2002 and several casino owners from Las Vegas attempted to enter the market.

Under the one country, two systems policy, the territory remained virtually unchanged aside from mega casinos popping up everywhere. All the rich ‘whales’ from the far east had no reason anymore to go to Las Vegas to spend their money.

Then came their biggest threat...