Bailout for Atlantic City Casinos

Things were seeming good for casinos in Atlantic City. While the Vegas of the East had struggled in the early 2000s, things had been looking good for AC.

There was concern that the introduction of online casinos would harm the already struggling industry. But, instead of harming the land-based casinos, online casinos provided new revenue from untapped sources.

That is, until Covid struck. 

Like many states, New Jersey pointed resources toward their main industries. But how much did they devote to the land-based casinos? And will it be enough to see them through?

How Bad was Atlantic City Hit?

Covid hit Atlantic City land-based casinos hard. Over $112 million in revenue was lost before they were allowed to begin to reopen on July 2.

And the effects hit the workers hard too. Nearly 50% of the local workforce was out of work during this time.

It fell in part upon the rather recently-established Casino Reinvestment Development Authority (CRDA) to jump in to try to help the casinos. 

Casino Reinvestment Development Authority (CRDA)

The CDRA is intended to take funds from casinos' gains and invest them in other areas of need in Atlantic City specifically, but also New Jersey at large.

The CRDA also oversees other areas in Atlantic City. For example, they approved a $15 million capital budget for the Atlantic City Convention Center. 

The New Jersey General Assembly Casino Bailout

The General Assembly passed S2400/A4032 on Thursday, September 24, 2020.

The legislation gives Atlantic City casinos for a reduction in taxes paid. This reduction is on gross gaming revenue (GGR), as well as a monthly deduction based on customers' promotional gaming credits.

It was expressed that casinos are to actively try to get as many furloughed employees back to work as they can.

Bipartisan success

This was a good moment of bipartisanship in an increasingly divided time in the U.S. Senate President Steve Sweeney (Democrat) and State Sen. Chris Brown (Republican), authored and promoted the bill together.

Brown was cautiously optimistic, saying “[O]ur goal is to get employment back up to pre-pandemic levels when over 27,000 local families held casino jobs. We have to take these initial steps and develop a plan, not a bailout, to help our local economy recover as quickly as possible.” 


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Takeaway quotes:

“The COVID-19 pandemic and consequent business closures have clearly not just reversed the consistent track of economic improvement that the Atlantic City casino industry had worked very hard to achieve over the last several years, but also has set back the economy of an entire region that is greatly dependent on the jobs, tourism spending and purchases that the Atlantic City casinos generate.”

 

Sources

Casino Reinvestment Development Authority (CRDA)

Press of Atlantic City article on Bailout 


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