A HISTORY OF GAMING IN ATLANTIC CITY

'OCEAN'S THIRTEEN' WEEK continues!

For this post, I went back into the vault. Being that George Clooney's Danny Ocean kicked off the first "Ocean's Eleven" film in Atlantic City (at Trump Plaza and Caesars), I figured we can post the history of gaming for the Queen of Resorts. It's a piece I had tremendous fun writing.
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A HISTORY OF GAMING IN ATLANTIC CITY

May 26, 1978.

For most of the country it was just another spring day.

Philly pitcher Phil Niekro handed the Braves a 4-2 win at Atlanta-Fulton County Stadium in front of a paltry 16,000; Denver Bronco wide receiver Scottie Montgomery was born in Shelby North Dakota; The Peter Fonda action flick “High Ballin’” was released; and such notables as John Wayne, Miles Davis, Lenny Kravitz and Stevie Nicks were all somewhere celebrating a birthday (we assume apart).

For gamers, though, it was a benchmark date because Resorts International, the first casino in Atlantic City opened to boffo business. The New York Times called it “Woodstock by the Sea” and they were right because the gaming floor looked more like Times Square on New Year’s Eve than a ritzy gaming hall. It’s daily win was over $750,000 and by June, total earnings would be a record-breaking $62.8 million.

Still, in order comprehend the success of casinos in Atlantic City, it’s crucial to understand why they were so desperately needed. Had New Jersey’s gaming bill never been passed, who knows what the city would look like today. Ultimately though, we all know “The Atlantic City Story” is a happy one. We see it as a redemptive case-study on how gaming – if regulated properly – can be an effective tool for urban redevelopment. So to honor the quarter-century or so of tossin’ dice on the wooden way, let’s take a stroll down memory to see how it all began.

THE LOST PROMISE
A national political convention usually provides a city with a substantial public relations and economic boost. But when the 1964 Democratic National Convention officially parked itself in A.C., the television public saw a much different resort town, once famous for attracting millions every summer. Empty hotels and bleak streets of row houses were a far cry from the legendary Steel Pier and its famed diving horses.

Most of the city’s majestic hotels like the Marlborough Blenheim, Traymore and Chalfonte-Haddon Hall were in disrepair and by 1970, they looked more like deserted crypts. City morale was also crumbling because the advent of cheap air-travel brought vacationers either west to Nevada or south to Florida. With its infrastructure weak-at-the-knees and crime on the rise, it wasn’t anyone’s shock that hotel occupancy was at an all-time low. If one thing was clear, it was that the city economy desperately needed casinos to survive.

But it wasn’t that simple.

After numerous gaming bills dying on the Assembly floor, New Jersey lawmakers were sending the message loud and clear that they didn’t want to become an East coast Nevada even at the expense of A.C., which by now had become a national punchline.

The Fat Lady was singing loudly.

THE PROPOSAL: NO DICE!
The first time New Jerseyans voted for the legalization of gaming was in 1974 with the original measure calling for casinos throughout the entire state. Since the referendum was expected to easily pass, very little pro-casino campaigning was done and in hindsight, considered a monumental mistake. Mainly due to the efforts of a homespun coalition called "No Dice," voters turned out in droves and the bill was defeated by a three-to-two margin. The “No Dice” lobbyists were relentless in their scare-tactics by exaggerating the dangers of a casino town. Their literature harped on the vices of gambling as well as the supposed moral, financial and social burden of running a such a city.

But what the “No Dice” clan failed to realize was that even in colonial times, gambling and lotteries were often detrimental to the survival of a village. The Virginia Company of London, the financier of Jamestown, Virginia, was permitted by the Crown to hold lotteries to raise money for the colonial venture. It wasn’t long before all 13 original colonies established lotteries of their own with proceeds helping to establish some of the nation’s most prestigious universities like Harvard, Yale and Dartmouth. Lotteries also supplied revenue to build churches, libraries and other municipal buildings. Once the Revolutionary War began, the Continental Congress even voted to institute a $10 million lottery to help finance the war, proving early on that that gambling can benefit the masses.

By 1976, the gaming issue was raised yet again but this time, though, its concept was considerably fleshed out. The bill was to be placed on the November ballot and called for privately-owned, state-regulated casinos only in Atlantic City. In addition, the gaming halls would be taxed with its revenues aiding the elderly and handicapped. A sly move since no referendum ever failed with a tax proposal aiming to help the elderly. It was a beautiful, philanthropic touch that helped Atlantic City get her second chance.

All she needed now was a pied piper.

THE DREAM WEAVER
In July of 1976, political consultant Sanford Weiner settled into his Atlantic Avenue office and mapped out his plan to convince voters to bring gaming to A.C.

Hired by the Committee to Rebuild Atlantic City (CRAC), it was Weiner's job to inform the state constituency that not only was a gaming bill essential to the survival of the city, but it could also serve as a tool for economic redevelopment. On the surface, many deemed him a high-priced spin-doctor with a fruitless challenge ahead. But the cunning strategist rolled up his sleeves because one way or another, he and CRAC would make New Jersey salivate at the notion of tossing dice on the Wooden Way.

He would aim to make gaming respectable and like a Picasso of persuasion, Weiner used simplicity as his weapon and specifically targeted the undecided voters in preliminary polls. With slogans like “Help Yourself, Help Atlantic City, Help New Jersey,” “YES CASINOS, Atlantic City Only” and “Create jobs, boost the economy” there wasn’t a billboard, bumper sticker or brochure throughout Essex, Bergen, Union or Hudson Counties he hadn’t touched.

By Election Day, CRAC came out swinging, clearly prepared this time for the “No Dice” clan who, by opposing gaming, unwittingly positioned themselves directly against the elderly. The voters saw the light and in the bitter cold November wind, Weiner and his staff celebrated outside CRAC headquarters because voters finally saw the potential in the state’s gaming bill.
“My friends, the city is alive again tonight!” Weiner said, addressing the crowd. “It’s not a close victory. It’s an outstanding victory! It’s party time in Atlantic City!”

A quick 18 months later, using Chalfonte-Haddon Hall Hotel as its foundation, Resorts International opened its doors with lines stretching down the boards and card sharks four-deep at the blackjack table.

THE REGULATION: AN EASY ‘ACT’ TO FOLLOW
Industry analysts have theorized that Atlantic City legitimized gaming mainly because of the state’s Casino Control Act, considered a model by other jurisdictions who seek gaming as an economic tool.

Signed in June, 1977, The Casino Control Act created the New Jersey Casino Control Commission (NJCCC), the state’s official casino regulatory agency. It’s primary function is to oversee the operation, development and regulation of the industry. In addition, the Casino Control Act also established the Casino Revenue Fund that was set up in response to the referendum’s promise to earmark funds for elderly and disabled. It’s capitalized by an 8 percent tax imposed on the gross revenue of each casino, and in turn, the state treasurer disburses the funds to programs authorized by the legislature and the governor.

The gaming act was so effective that 25 years later, 30 million visitors pass though town annually and the city boasts a redevelopment engine that purrs stronger than a vintage Ferrari. The hands-down success of gaming can be further seen when the original campaign promises are compared with the eventual results:

- In 1976, it was promised was that there would be 33,690 new jobs in the state by 1985, including 24,600 in casino hotels. Currently, a tad under 50,000 are employed. And with the opening of the Borgata Employment Center, an offsite employment office at the A.C. Convention Center, the new hotel will hire more than 4,800 dealers, slot attendants, valet parkers and front desk clerks. At press time, roughly 27,000 people have applied for jobs and 1,000 people a day are being interviewed.

- It was also promised that there would be $844 million in new construction by 1985 in Atlantic City. According to the American Gaming Association, there has been $3 billion in capital investments by casinos to date. Plus, the gaming industry purchases over $1.7 billion in goods and services from area business.

- By 1985, the New Jersey’s gaming industry would strive for $330 million in new wages. In reality, annual payroll currently exceeds $1.2 billion.

And consider this staggering statistic -- annual revenues for Atlantic City casinos are just a tad lower what the carpet joints bring in on the Vegas strip. In 2001, the famed Sin City stretch brought in $4.7 billion while Atlantic City casinos trailed at $4.3 billion.

Through the years, regulations were softened on A.C. casinos in order to be more competitive with other gaming jurisdictions. That said, deregulations eventually allowed 24-hour gaming; horse racing simulcasts; increases in slot space and the ability to give cash comps. It also eliminated the three-property limit on casino ownership, paving the way for companies like Park Place Entertainment to own Bally's, Caesars, the Claridge, The A.C. Hilton and Wild Wild West Casino. Still, even with all the deregulation, analyst Joyce Minor of Lehman Brothers says that “Atlantic City's fundamentals are still strong while other major gaming markets, such as Las Vegas, have softened.”

THE BUILDING BOOM
As soon as singer Steve Lawrence threw out the first pair of dice (he rolled a five, then crapped out), it was clear that Resorts was an instant success. Even though 10 of their blackjack tables were closed and with a shortage of changepersons, the casino was well on its way to a record-breaking $3 million weekend and had 80,000 people walking through the door daily.

The monopoly wouldn’t be held long, though. By June 1979, Ceasars Boardwalk Regency opened it’s doors in the renovated Howard Johnson’s Regency Motor Hotel. Upon opening, original owners Clifford and Stuart Perlman enjoyed much of the same riches as Resorts and eventually took in $91 million that year, surpassing their Vegas and Tahoe namesakes combined. Crowds were so large, in fact, that only 2,500 people were let in at a time.
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Bally Manufacturing also wanted their piece of the pie. They leveled the old Marlborough-Blenheim, restored the 500-room Dennis Hotel for $7 million and in December opened as Bally’s Park Place, the wooden way’s third casino. In an effort the capture the essence of bygone days, several gargoyles were retrieved from the towers at the Blenheim and preserved in the casino lobby. In July 1997, Bally opened the cowpoke-themed Wild Wild West Casino.
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In August 1980, The Brighton was the first casino in town built from the ground up, on the site of its former namesake at Indiana Avenue & Brighton Park. After a healthy opening, financial troubles soon arrived. Some say it was due to the casino’s diminutive size. Others say it was poor management. Whatever the case, it was sold two months later to the PPI Corporation, which also owned the Sands in Las Vegas. To capitalize on the famed casino and to hopefully conjure images of Frank, Dean and Sammy, the Brighton was renamed The Sands the next May. ##
The first casino to be built away from the boards was the Holiday Inn Marina casino. Bill Harrah, who already owned casinos in Tahoe and Reno, had dreams of coming to Atlantic City, but unfortunately passed away. His company interest was soon sold to Holiday Inn, but since the Harrah tag had more marquee value, the property was renamed Harrah’s Marina. Ever since it opened in November 1980, it’s been consistently one of the city’s top revenue generators and a customer service favorite.
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The last casino to use an existing hotel as it's structure was the Claridge in July 1981. When the first bet was placed, it was called Del Webb's Claridge Hotel and Hi-Ho Casino. Webb, who died in 1974, was a pioneer in gaming. Not only had he built Bugsy's Flamingo in Las Vegas, but Webb also built the Sahara, had holdings downtown in the Mint, the Sahara Reno, the Sahara Tahoe and the Nevada Club in Laughlin. After the opening, the Webb Corporation soon bought out its partners, the D’Addario group, to become the hotel's sole owners. Currently, the Claridge operates as an arm of Bally’s.
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Ramada Inns paid $20 million for the old Ambassador Hotel on and had lofty plans to renovate the structure until Governor Brendan Byrne and the Casino Control Commission put an end to what they called “patch and paint jobs.” A compromise was made – Ramada would peel the bricks from the facility and only use its steel framework. Just as construction was underway, Ramada acquired the Tropicana in Las Vegas and it wasn't long before the East Coast version of the carpet joint was open to gamers in November 1981. Soon after, the hotel constructed an indoor amusement park called Tivoli Pier, aiming to reproduce old A.C. piers of the past and by 1988 it was known as TropWorld Casino and Entertainment Resort. Ultimately, the family theme didn't work and the Tivoli Pier was closed in 1995 to make way for a new poker, keno and simulcast area which opened in 1996.
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In March 1987, the Showboat opened on the boards at Delaware Avenue with a flamboyant family-friendly casino complete with animatronic robots. On an eight acre parcel of land leased from Resorts, the initial 516 room hotel was also the first and only casino to have its very own bowling alley since it's Vegas property regularly sponsored PBA (Professional Bowlers Association) tournaments. Showboat was also the first casino to open a simulcast area as well as offer poker. Current owner Harrah’s is completely revamping the property as a state-of-the-art, Mardi Gras themed wonderland.

THE GOLDEN BOY
The savvy manner in which Sin City mogul Steve Wynn came to build in town is certainly a case study in red-blooded American Capitalism. On the suggestion of Resorts owner Jack Davis, Wynn mosied downbeach to the old Strand Motel and speak with owner Manny Soloman about a purchase. Twenty-five minutes and $8.5 million later, Wynn had his casino site for what would be an East Coast version of the Golden Nugget. Sixteen months after the deal in December 1980, Wynn’s 22-story casino opened and was city’s top dog. Profits for the first month were a reported $17.7 million – more than the rest of the A.C. casinos combined.

When it came to luxury, the smiley entrepreneur pulled no punches and made his joint as elegant as possible (plus he snagged Sinatra for a string of dates to boot). To this day, many gamers still regard the property (now the A.C. Hilton) as “The Jewel of the Boardwalk.” Wynn even had plans to build in the marina, but they were soon scrapped due to the state’s strict regulatory rules and a wee bit of competition from an equally flamboyant developer and rival, Donald Trump. Disgusted, he eventually sold the property to Bally’s for $400 million, who, in turn fittingly called it Bally’s Grand. Many gaming scholars believe that Wynn used the bulk of the cash as seed money to build his visionary Mirage in Las Vegas.

THE ILL FATED
It doesn’t take an Harvard MBA to realize that the success of gaming in Atlantic City brought tremendous promise to the area. At the peak of the building boom, 54 planned casinos were “in development.” Familiar names like Sahara, Lady Luck, Dunes and not so familiar ones like Camelot, Ritz, Atlantic Land and Golden Pyramids were all tossed about.

Even Penthouse publisher Bob Guccione wanted to open a Penthouse Casino but after continuous red tape, scrapped plans to convert the former Holiday Inn and Four Seasons into a gaming hall. Like he’d never been there, the $50 million operation was abandoned with the steel super-structure standing like a giant Erector set.

Playboy founder Hugh Hefner fared slightly better with his Playboy Casino. Built with the Elsinore Corporation on Florida Avenue, it opened in April 1981 and had problems from the get-go. Most gamers chalked it up it’s quirky three level design, narrow floors and smallish-size. After years of appeals to the gaming board for licensing, Playboy finally sold it’s interest to Elsinore who renamed the property Atlantis. Five unprofitable years later, it closed, and was the first casino in town to fail.

THE ART OF THE DEAL
Hands down, no figure is perhaps as integral to the development of Atlantic City as Donald Trump. With the exception of the Tropicana and Claridge, the P.T. Barnum-like exec has had security or asset purchases with every casino in A.C. and at one point controlled 40 percent of the city's gaming space. Known for erecting and perfecting some the swankiest joints in town, here's a brief rundown of the Donald's long history in the Queen of Resorts:

- In May 1984, he opened his first casino, a joint venture with Harrah's named “Harrah's at Trump Plaza,” located on the boards at Mississippi Avenue. It was agreed that the developer would build the 614-room casino while Harrah's/Holiday Inns, Inc. would manage it. When the Donald had issues with the way Harrah's operated, the partnership was soon severed and Trump bought them out. The hotel would eventually be known as the brassy and classy Trump Plaza.

- Hilton Hotels acquired a parcel of land in the marina land in the early '80's and started construction on what would be called the Atlantic City Hilton. After the company was denied a gaming license, Steve Wynn made a bid to buy control of the Hilton Hotels. But the Donald had other plans. Hilton quickly announced they would accept Trump’s $325 million offer for the marina site, sparking a bitter feud between Wynn and Trump. Even though the casino opened in June 1985 as the Atlantic City Hilton, brandishing chips with rainbow logos splattered everywhere, it was quickly renamed Trump Castle and ultimately to Trump Marina.

- In 1989, Trump purchased the closed Playboy/Atlantis casino hotel and named it Trump Regency, an upscale non-casino joint. In 1996, the casino became the Trump World’s Fair Casino, and operated as an arm of Trump Plaza before officially closing in October 1999.

- Conceived by Resorts founder James Crosby in 1982, The Taj Mahal was an ambitious project that had just about financially drained the company by the time he died in 1986. Trump gained control of Resorts International in 1987 and after a bidding war with Merv Griffin, negotiated a settlement in which Trump would take over the Taj Mahal project with Griffin keeping the rest of Resorts' Atlantic City holdings as well as the Paradise Island Casino in the Bahamas. When the Taj opened in April 1990, it was the tallest and most extravagant building in the state, and certainly unlike anything Atlantic City had yet seen.

IMPACT AND RECONSTRUCTION
Considering that the Atlantic City gaming industry has generated more than $7 billion in taxes, it seems that casinos have delivered in spades. Still, realizing that area housing and beautification was an ongoing issue, the state amended the Casino Control Act in 1984 to create the Casino Redevelopment Authority (CRDA).

Its projects are funded by the Casino Reinvestment Tax, which requires that operating casinos to invest 1.25 percent of their gross revenues in the tax fund either through the purchase of bonds issued by CRDA, or through direct investments in or donations to CRDA approved projects. Another measure of the CRDA was a $2 casino parking fee instituted in 1993 that would also finance infrastructure improvements. Initially, the CRDA coffers were used to construct the “corridor project” which now connects the new Convention Center at base of the A.C. Expressway to the Boardwalk and replaced blocks of urban blight.

Municipal projects that have benefited from CRDA cash include street widening, lighting, park improvements, various hotel expansions, retail complexes, historic restorations and most important, new housing construction. Since it’s inception, the CRDA has helped Atlantic City undergo an unparalleled multi-billion dollar redevelopment renaissance:

- The $268 million new Atlantic City Convention Center opened in May 1997 and was considered to be the cornerstone the renaissance. It boasts more exhibit space than any other convention center from Atlanta to Boston. A new A.C. Bus terminal opened in February 1997 and is within walking distance.

- The CRDA has funded and completed construction on almost 2000 gorgeous housing units, increasing A.C. housing stock by 12 percent. In 2001, approximately 120 new housing units were in development. It’s Millennia Square neighborhood, located in the Northeast Inlet neighborhood even offers 6 solar-powered homes.

- A $90 million renovation to Boardwalk Convention Hall has transformed the facility to a world-class entertainment venue, now home to the Boardwalk Bullies, an east Coast Hockey League franchise not to mention boxing and headliners like Bon Jovi and Bruce Springsteen.

- The CRDA also helped fund much of the $3.5 million needed to restore the historic Absecon Lighthouse, located on Pacific and Vermont Avenue. It also aided in the $4 million Ocean Life Center, a catalyst for the revitalization of Historic Gardner’s Basin.

- Other community enrichment projects include the 6,000-seat Sandcastle Stadium, Flyers Skate Zone, the NHL regulation-sized ice rink; a $3 million Boys and Girls Club; the Mayor J. L. Usry Child Day Care Center and the 46,000 square foot AtlantiCare Healthplex Ambulatory Care Center.

- “The Walk,” located at the base of the A.C. Expressway is a dynamic urban retail and entertainment project with outlet retailers, interactive entertainment and eateries. It lines the Michigan Avenue corridor and covers 8 city blocks.

- The CDRA provided $20 million in subsidies to help underwrite the $225 million two-phase expansion of The Quarter at Tropicana. It features 194,000 square-feet of retail, dining and entertainment with a three-story shopping village complete with old Havana as its theme.

Thanks to the CCC and the CRDA, itt’s looking more and more like Atlantic City is back enjoying the riches of her former self and who knows what the next 25 years will bring.

Here’s to gaming in A.C.!