Trump Plaza sat in the center of the boardwalk. Come off the Atlantic City Expressway, and there it loomed, a white monolith projecting surrender in stained carpets, roped-off pits and the neon U LAZA sign staring balefully down the boardwalk.
Few gamblers came to see it off, though Marie Morlachetta stopped by late Sunday night to say goodbye to the staff and to pronounce — upon discovering no toilet paper in her bathroom stall — “This place has been going to the dogs for a long time, but I still love it.”
On the morning of the casino’s closing, a memorabilia collector parks himself among the rows of blinking, blaring, vacant slots and keeps feeding it titos – ticket in, ticket out – to get one time-stamped as close as possible to the final minute.
But mostly the dealers pack up chips, and cocktail waitresses serve the last of the vodka and coffee, and everyone checks their watches. That evening, they gather by the hundreds at a 24-hour bar where they used to go to decompress. They call out to each other, a parade of Johnnies and Kennys and Joeys and Ritchies and Debbies.
Some left the Plaza years ago for the greener pastures of casinos in other states, but many spent their entire careers there. “We spent 30 years together,” says Debbie Fortier, a cocktail waitress. “We were together longer than most marriages.”
They spill out in the parking lot and smoke cigarettes and take pictures and tell stories about the days when Donald Trump still ran the place and the high rollers laid down $10,000 bets and tipped $1,000 a hand and celebrities floated through like fairy dust. “It was exhilarating,” says dealer Ken Gonsalves, who opened the place in 1984.
The Plaza had become the limping property at the back of a herd of what were once 12 casinos in Atlantic City. No one was surprised when it failed to outrun the logic of the convenience gambler, the day-tripper upon whom Atlantic City had become dependent.
“Why would I drive two and half hours to come here, when door-to-door from my house to Mount Airy Casino is 45 minutes?” asks Peter Bryn of Budd Lake, N.J., in town for nearby firefighters’ conference.
So sounds the death knell of an East Coast monopoly. So goes the elbow-throwing era of state-sanctioned casino gambling. Get in while the getting is good. Build them big. Tax them high. Divert the stream of cash before it crosses the border.
In 2006, gross gaming revenue was $9.5 billion in the northeastern U.S. market. In 2013, it was $11.7 billion, a three percent annual growth rate, says David G. Schwartz, director of the Center for Gaming Research at the University of Nevada, Las Vegas.
Some casinos thrive. Others languish. The new lure customers from the old. A favored word in play: cannibalization.
“The monopoly of gaming for Atlantic City ended five years ago, and the fact that no one woke up and said this is a chapter that’s closing and we need a new chapter was beyond me,” says Mayor Don Guardian, who took office in January and whose campaign slogan was “A New Beginning.” “We put all our eggs in one basket, and you never put all your eggs in one basket.”
The air in Atlantic City these days is laced with belated recognition. This city is famous for its pessimism (“I heard a guy complain that if Fort Knox brought a traveling exhibition of gold bars to the convention center, overnight they’d turn to lead.” “You building Atlantic City’s future?” asks the reporter to the worker outside the massive Bass Pro Shop construction site. “Its next demise,” he answers.)
But that’s not all to be found here. Atlantic City has always been a place of contradiction. Neon artificiality, food -stamp reality, persistent urban decay, spectacular natural beauty, multiethnic, multiracial, multilingual — it’s a town that gets beneath the skin, refusing to allow you to give up on it. “The locals call it getting sand in your shoes,” says Trump Plaza security guard Stanley Smith. “And once you have it, you can’t get rid of it.”
A city that reinvents itself as often as this one perseveres on the memory of the good old days left behind and the promise of better days ahead. In a seaside town, there’s always next season. Now, however, it must deal with an economic crisis.
“You want to talk ripple effects?” says Frank Formica, an elected county official and owner of a 95-year-old family bakery that supplies some of the casinos. “The ripple effects are tidal waves.”
Four casinos closed in nine months. A fifth threatens to close by Thanksgiving. Almost 8,000 workers got pink slips. Many of the lost positions were considered good jobs with union-negotiated benefits, and people made careers out of them. They bought houses. They raised kids. They put themselves and their kids through college and went to the dentist regularly and had their nails done.
You don’t have to think too hard about what the ripple effects might be.
“We have about 800 casino workers living here,” says Egg Harbor Township Mayor James “Sonny” McCullough. “We’ve seen this before. As the casinos started to cut back around 2008, 2009, and started moving toward a part-time workforce, we started seeing a lot of foreclosures. It still costs the same amount of money to operate a town. You still have trash pickup. You still have law enforcement, and you still have education. Sixty-five percent of the budget goes to education.”
Things started going bad in 2007, the year after Pennsylvania opened slots, henceforth known as the Year of No Going Back. Within four years, Pennsylvania bumped Atlantic City out of second place behind Nevada in annual gaming revenue. In 2013, Schwartz says, Pennsylvania’s gross gaming revenue was $3.1 billion. Almost two-thirds of those winnings came from eastern Pennsylvania — gamblers who otherwise would likely spend their money in Atlantic City.
As Pennsylvania rose, Atlantic City fell from a 2006 peak of $5.2 billion in gross casino revenues to $2.8 billion last year.
Considering that Atlantic City’s long monopoly ended with the start of the Great Recession, bad quickly became worse. Trump Plaza dealer Ray Ngo pulls his last paycheck from his pocket. Net pay: $95.59. Trump Plaza dealers’ weekly toke rate, the pooled tips they divvy up, fell from a high of $20 an hour to an average of $10 an hour. In the last full week of business, the toke was $6.56 an hour.
The ripples show up in the 2,091 unemployment insurance claims filed by casino workers after Showboat and Revel closed. They show up in the more than 1,500 job-seekers who met with 60 employers at the Department of Labor and Workforce Development career fair held at the Atlantic City Convention Center.
The ripples also show up in rising real estate taxes – already among the highest in the country — which Atlantic City has been raising by double digits of late. Ninety percent of the city’s budget comes from real estate taxes.
In 2010, the city’s total assessed property value was $20.5 billion, says Michael Stinson, the city’s director of revenue and finance. In 2014, it had fallen to $11.3 billion and is heading south. The majority of that drop is a result of successful appeals by the casinos for reassessments. Because of the straits the city now finds itself in, Stinson says, federal and state government is kicking in a combined total of about $30 million to help cover essential services including firefighters through the end of the year.
“The monopoly of gaming for Atlantic City ended five years ago, and the fact that no one woke up and said this is a chapter that’s closing and we need a new chapter was beyond me.”— Atlantic City Mayor Don Guardian.
The less money Atlantic City has to contribute toward the county budget, the more the surrounding jurisdictions have had to kick in, meaning they, too, have been raising real estate tax rates.
Frank Formica is chair of the equivalent of Atlantic County’s Board of Supervisors, here called the Board of Chosen Freeholders. The area he represents includes Atlantic City. He is also the owner of Formica Bros. bakery, which bakes 20,000 to 50,000 pieces of bread a day and has nearly 70 employees. “We delivered somewhere around 2,000 to 3,000 pieces a day to Trump Plaza at its peak,” he says. “The Atlantic Club was 1,000 a day. Revel, a couple thousand pieces a day.”
He says he expanded operations into a neighboring county and picked up 100 more accounts over the last five years to try compensate for the loss he feared was coming. “So, people might say, ‘What’s Formica crying about?’ I used to deliver the equivalent of those 100 accounts within a mile radius of our bakery to the casinos. Now, we do it in a 40-mile radius with two extra trucks and drivers that add 180 hours of labor and 1,000 miles of gas, tolls and wear and tear per week.”
But, he says, “from forest fires come new trees. This is a wakeup call for Atlantic City to become something only it can become.”
“One thing that has never been underscored in what is happening here,” Formica adds, is that “no other city in the U.S. will ever be the first exclusive monopoly outside Nevada in the rest of your days. No other city had a mandated legislative monopoly. No other city with gaming outside Vegas exploded like Atlantic City, and no other city could implode like it . . . We were Vegas’ only competition, and now everyone is our competition.”
Atlantic City is a town of 40,000 people, 48 blocks long, three-quarters of a mile wide at its widest. Its budget is about $270 million. About one-third of its residents live in poverty. More than two-thirds of its adults age 25 and older have a high school diploma or less.
In July, its non-seasonally-adjusted unemployment rate was 13.9 percent, more than twice that of New Jersey’s. The good news is that’s lower than in was in July 2013. The not-so-good news is that its labor force is shrinking, as well.
Cuts are coming. Pain is inevitable, Guardian says, though he hopes to avoid mass layoffs in City Hall through attrition.
Guardian is a man with a snap in his stride and a vision for economic diversification that includes turning Atlantic City into a university town, better educating its workforce, extending the boardwalk and creating the equivalent of Baltimore’s Inner Harbor. It includes a plan to grow the city’s retail base and to diversify the tourist industry to attract a greater range of entertainment and conventions.
“We need to become a real city and not just a Jersey Shore town,” he says.
No one, the mayor says, saw the collapse of four casinos in a single year. A fifth, the Trump Taj Mahal, is in bankruptcy, with the owners making noises about closing in mid-November if the union doesn’t make some concessions. The Taj is a colossal property, as was Revel Casino. Showboat, which sits between them, was no slouch. One end of the boardwalk would fall into silence should the Taj go, and if there is one thing the boardwalk will not tolerate, it is silence.
So, investors sniff. Inquiries are made. The lowball offer is readied. Revel cost $2.4 billion to build. The opening bid at this week’s auction is expected to be $90 million. The city still houses a $2 billion-plus casino industry. The other local casinos, particularly those at the marina, have seen their revenues rise with the culling, and a few years ago several began to expand into true resort/entertainment facilities.
Plus, as everyone here will tell you with a wide sweep of the arm toward the beach and the sun sparkling off the Atlantic Ocean, “We’ve got this.”
The morning after Trump Plaza closes, a 51-year-old Plaza bartender sits with the 54-year-old Plaza cocktail waitress at a one-stop shop set up by the state Department of Labor and Unite Here, local 54, and helps her apply for her unemployment benefits.
“This is all I know,” she says.
The newly jobless move from station to station, applying for food stamps, if needed, getting information in English, Spanish and Gujuarti on credit counseling, mortgage modification, job training, Social Security and help with the utility bills.
Gonsalves says his wife is a part-time dealer at Borgata, the hot property in the city, and so he’s going to take some time to catch up on projects around the house. One day, when his little ones are grown, he’ll tell them about the last night at the Plaza and how he dealt the last hand:
In the casino’s last hour, only one table is open. Two players take a seat. One is the husband of a dealer, and he keeps a steady stream of tips going Gonsalves’ way. The other is a scruffy guy in a camouflage jacket, who later declares his name classified on a need-to-know basis.
Gonsalves, a miracle to watch with the cards, does his thing. Mr. X proceeds to lose hand after hand through a stream of complaints about how he’d been playing at the Trump Plaza since damn near the beginning of time and how it had been mismanaged into oblivion.
“I’m really here for sentimental reasons, you know,” he says. “I wanted to play one last sh—y hand in a sh—y casino.”
“Alright, last hand gentlemen,” the casino manager says.
Gonsalves deals. ”Good luck,” he says.
“All in,” Mr. X says. “Just go crazy with it. Just wild.”
No one will remember what the two players’ hands show, because Gonsalves shows an ace. And then turns a queen.
House wins. House loses, and so it goes and always has in Atlantic City.