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Crowd on Atlantic City beach. (Photo: City of Atlantic City. )

With Atlantic City's gambling monopoly in tatters and the city making a slow transition to build a more family-friendly resort, Shore-area officials are bracing for a dry spell.

They have seen the good times: employees with middle-class wages who can buy homes, visitors who spend money on the drive down and precious tax revenue.

And the bad times? "When Atlantic City suffers, the entire area suffers," said David Breeden, administrator of Barnegat in southern Ocean County. "The most important thing that people need to realize is, as Atlantic City goes, so goes the region."

More than 1,000 casino workers live in Ocean County, the second highest concentration of gaming workers outside of Atlantic County. And that doesn't include employees who work for companies that support the casinos, such as food and equipment suppliers. About 100,000 jobs, or 2 percent of the state's workforce, were tied to the gaming industry in some way, according to a 2008 Rutgers University study.

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Atlantic City's $2.9 billion casino industry is retrenching, and few areas in the state will escape the pain that comes with it. The biggest concerns: a flood of unemployed workers and falling incomes and property values that will cut into tax revenue. Less taxes for state coffers usually means higher taxes for everyone else or cuts to services.

The casino industry and its workers paid nearly $1 billion in state and local taxes in 2008, Rutgers said. That's enough money to run both Atlantic and Ocean counties' governments for more than a year.

The casinos' losing streak, ongoing since 2006, has picked up momentum this summer. The two-year old, 1,900-room Revel entered bankruptcy for a second time, and the older Showboat and Trump Plaza casinos announced they plan to close at the end of the season. It has prompted local leaders and visitors to press the city to give up chasing gambling dollars and focus on other entertainment options.

A sign of the times: An empty boardwalk in front of the Revel Casino in Atlantic City. (Photo: Mike DeSocio/Asbury Park Press )

For a city whose roots include speakeasies and gangsters, it represents a culture change that hasn't yet kicked in. Families on the boardwalk wondered why some casino swimming pools are open only to adults. And even if the city makes a perfect transition, attracting families and conventioneers, it will take many years to make up for the more than $2 billion in revenue that's been lost at the casinos.

"It's coming at a bad time," Stafford Mayor John Spodofora said, noting many residents of his town are still trying to rebuild after Sandy struck in October 2012. "There are not many big corporations that hire people down here. The casinos have been a bit of a boon for people down here. There are vendors that are outside the actual casino industry that are going to be hurt, too."

For now, Atlantic City has 11 casinos that have generated $1.3 billion in revenue the first six months of the year. It's down 7 percent from the same time last year, according to state statistics.

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On a muggy summer day last week, the boardwalk was teeming with visitors, and you could hardly tell the city was in the midst of a storm. But many have been here before, and by their observations, times have changed.

Danny and Joyce Chiara of Jersey City were walking on the boardwalk last Tuesday, taking a break from gambling at Caesars. Their three-night stay was free, but they swore they lost enough at the slot machines for the casino to make up for it.

Danny, 86, and Joyce, 81, have been coming here for 20 years. The past few, they have passed the Pennsylvania casinos closer to home to visit the seaside resort. But they think the casinos have been scaling back on their comps — the freebies to encourage visitors to gamble there.

"They gave you so much more years ago," Joyce Chiara said.

"They can't afford it," Danny Chiara said.

Fast fall

The collapse has been swift. Atlantic City, which started the year with 12 casinos, might end it with eight.

Among the casualties:

• The Atlantic Club closed in January. The casino, which opened in 1980, had more than 1,700 employees as of 2012, according to state statistics.

• Revel, the glitzy $2.4 billion casino that opened in April 2012 on the north end of the boardwalk, filed for bankruptcy in June. The casino is scheduled to be auctioned in August. Revel had 3,516 employees in 2012.

• Also in June, Caesars Entertainment Corp. said it would close Showboat at the end of August. The casino opened in 1987, has 1,300 hotel rooms, a rooftop swimming pool and the House of Blues nightclub. Showboat had 2,308 employees two years ago. But its revenue has declined by 55 percent, from $429.5 million in 2006 to $192.7 million last year. And the first six months of the year were no better; revenue was down 16 percent from last year, according to the New Jersey Division of Gaming Enforcement.

• Last week, Trump Plaza Associates said it expected to close its casino, Trump Plaza Hotel and Casino, around Sept. 16. The casino opened in 1984 and made its name by hosting a couple of Mike Tyson fights early in his career. Trump had 1,153 employees. It has 906 rooms and features the Rainforest Café. But its revenue plummeted, from a peak of $341 million in 2002 to $74 million last year, or 78 percent.

All told, the four casinos account for more than 8,000 jobs, or 25 percent of the industry's employment, said Bob McDevitt, president of Local 54 of UNITE-Here, the city's casino workers' union.

This summer's abrupt downsizing has come as little surprise. Atlantic City's 30-year near monopoly on East Coast gambling has been shattered during the past eight years as states such as Pennsylvania, New York and Delaware, searching for new sources of revenue during tough economic times, opened casinos in the heart of Atlantic City's customer base.

The market — motorists who are within a full-tank of gas from Atlantic City — is worth about $6 billion, said Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism at the Richard Stockton College of New Jersey.

It's still a lot of money, but Atlantic City casinos are learning a hard lesson about the perils of competition. No longer is it enough to open the doors and wait for the crowds to arrive. Now, they need to shift gears: find a niche, refurbish, innovate, add restaurants, spas and other non-gambling options, Posner said.

"The market for casinos themselves is fairly saturated," Posner said. "The real important question is, what is the quality of the product that is offered in that casino-hotel?"

Atlantic City, NJ - A family walks down the Atlantic City Boardwalk.(Photo: By Mike DeSocio/Staff Photographer)

Online fizzle

Operators of Showboat and Trump Plaza said they are considering their options, including a sale.

The idea has merits: The state last year allowed companies with operations in New Jersey to offer online gambling to New Jersey consumers. It could open the door for an Internet gambling company to buy one of the closing properties.

But online gambling in the first year has fizzled. "Since the revenues from Internet gambling have been underwhelming so far, I think the interest among Internet gambling companies acquiring a casino has cooled considerably," said Joseph Weinert, an analyst at Spectrum Gaming Group, a Linwood-based consulting firm.

The casino industry's downsizing is one reason New Jersey's job market has trailed the nation. From 2007 to 2013, the sector that includes gambling jobs rose 19.4 percent nationwide — and fell 2.2 percent in New Jersey, according to federal employment data.

Ocean County could get hit hard. It had 1,013 casino industry employees at the end of 2013, the second most in the state. It is far behind Atlantic County, which had more than 27,000. But local officials said there are many more workers in their towns who are employed in jobs that depend on the casinos, including construction and businesses that serve the casinos or sell products to their patrons.

"It breaks my heart to see this happening to our people," said Little Egg Harbor Mayor Arthur Midgley, who estimated there are 1,000 to 1,500 people in his town of 16,000 who work in the casino industry. He said the impact of casino industry contraction on Little Egg Harbor's economy could be devastating, because few local jobs pay as well as those in the casino industry.

"It's a serious issue," Ocean County Freeholder Director Joseph H. Vicari said. "We're going to carefully monitor it. It could impact property values in those towns."

Atlantic City Boardwalk, July 4 weekend, 2014. (Photo: City of Atlantic City. )

Painful transition

It's unclear if a revamped Atlantic City will ever offer the same types of well-paying jobs that the casinos brought to the area. Jobs like the one Absecon resident Melanie Gillespie has had at the Showboat, where she's worked as a cocktail server for 18 years.

"It's a great job, full-time work, pension, benefits," said Gillespie, 37, a single parent with an 11-year-old daughter, Ella. "I've been able to raise my daughter on this job for her whole life."

Atlantic City officials say they aren't giving up. Union President McDevitt said that while Atlantic City is in the midst of "a horrible crisis," all is not doom and gloom. The city still draws about 27 million visitors a year and is still drawing new investment, he said

Atlantic City Mayor Don Guardian, who took office in January, said the city is going through a painful — but necessary — transition from gambling-centric town to a tourism destination where casinos will play a much reduced role.

"We had gaming, and we put all our eggs in one basket," Guardian said during a recent teleconference to discuss Atlantic City's attempts to diversify its tourism offerings. "We were foolish. We had a monopoly."

They are trying to take a page from Las Vegas, where gambling generates only about 30 percent of revenues, with retail, entertainment and dining making up the rest, according to Liza Cartmell, president of Atlantic City Alliance, a casino-funded marketing group. Gambling still accounts for a little more than 70 percent of Atlantic City's revenue, although non-gaming revenue has climbed steadily.

Cartmell noted that it took Las Vegas 20 years to make the transition.

To do that, Atlantic City is focusing on its natural assets to lure visitors: its wide Atlantic Ocean beaches and famous boardwalk have been crowded on recent summer weekends, officials said. Nearly 200,000 people attended the Sand Sculpting World Cup, held on the beach near the Steel Pier last month.

It has formed Meet AC, a nonprofit agency funded with $8 million from the Casino Reinvestment Development Authority, the CRDA. It will focus on attracting meeting and convention business, she said.

Meantime, the abandoned casinos will need to be redeveloped. The Atlantic Club was purchased in May by a Florida development company that previously remade the former Claridge Casino into a hotel where a new children's museum may soon be added. The Atlantic Club could become a residential or entertainment complex.

The plan is starting to pay off, they said. Atlantic City itself has seen non-gaming revenues — like income from bars, eateries, spas — rise by more than $160 million in the past two years to nearly $1 billion, Casino CRDA Executive Director John Palmieri said during the teleconference.

But gaming revenue has declined by more than $2 billion since 2010.

Boardwalk visitors last week said they noticed the changes. But they had plenty of ideas for improvement, most of which involved water activities like swimming pools and water slides for children. They said they can only spend so much time in an arcade.

George and Marla Korkus of Plymouth Meeting, Pennsylvania, visited with their three children, Kalya, Lana, 2, and Malina, 1, and offered reassuring comments for New Jerseyans: Sure, Pennsylvania's casinos are nice, but they don't have the beach and boardwalk.

They sat on the beach and strolled the boardwalk. They went to Jimmy Buffett's Margaritaville restaurant at Resorts casino, visited Steel Pier and took a helicopter ride.

But they also noticed a town still clinging to its gambling roots. The swimming pool at Caesars is open only for adults. It means if the Korkus family is trying to find a place to visit during the winter, Atlantic City won't be in the mix.

"Maybe if anything they would make it a little bit more family friendly, (offer) a little more for the kids to do," Marla Korkus said.

Atlantic City, NJ - Workers wait with their rolling carts for customers on the Atlantic City Boardwalk.(Photo: By Mike DeSocio/Staff Photographer)

Number of casino industry employees, by county

Atlantic: 27,816

Ocean: 1,013

Camden: 900

Cumberland: 773

Cape May: 740

Source: New Jersey Attorney General's Office, Division of Gaming Enforcement

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