Mark Giannantonio, the CEO Of Atlantic City's Resorts Casino, predicted that 5 Atlantic City casinos would close, if the state built two casinos in North Jersey. Giannantonio spoke Thursday at the East Coast Gaming Congress, claiming the North Jersey casino initiative would be the effective death knell of Atlantic City's 8-operation casino industry.
The Resorts Casino CEO said the closures would happen "fairly immediately" after the opening of casinos in Jersey City and the Meadowlands, which are the most likely locations for the North Jersey casinos. Atlantic City's casino industry contracted by 4 casinos in 2014, costing the city 8,000 jobs. Because 70% of the city's property taxes were paid by the casino industry, the city's tax base cratered due to the loss of jobs and property taxes.
Report on North Jersey Casino
Resorts Casino plans to back up its CEO's predictions in the next few days, when a Resorts-commissioned study is set to be released. Giannantonio indicated the report is going to back up his words with scientific evidence and statistics.
Giannantonio told a crowd at Harrah's Waterfront Conference Center, "Our findings are quite clear. Three to five casinos will close. The fallout of those three to five casinos will be, potentially, 23,000 job losses. Foreclosures will double, unemployment will double. I can go on with many, many more metrics."
Predicted Loss of 23,000 Jobs
Not all of the 23,000 jobs lost would not be jobs inside the casino. As the situation with Atlantic City's financial meltdown indicates, government jobs are going to be lost when the tax base erodes significantly. The building of infrastructure is important for the tourist economy, so if tourist destinations go away, construction and maintenance jobs go away, too.
Giannantonio described the communities which would be affected by the job loss. He listed "Somers Point, Galloway, Egg Harbor Township, Linwood," then added, "Those communities will suffer immensely."
Atlantic City's Failing Job Market
Atlantic City had a population of about 40,000 when the casinos closed in 2014. About 40% of the population at any given time is either underage or retired, meaning that 16,000 people were not in the workforce. Of those in the potential workforce, about 5% are unemployed at any given time, which would be 1,200 people.
Thus, about 22,800 people were employed in Atlantic City when the 8,000-person job loss happened with the casino industry. That would be about 35% of the workforce lost.
AC Metropolitan Area
Not all of those jobs were residents of Atlantic City, of course. Some of those people would live in Somers Point, Galloway, and Linwood. The 23,000 lost jobs the Resorts Casino CEO predicted also would be spread throughout the surrounding municipalities.
Whatever the case, if that many jobs were lost, the entire region's economy would crater. Local governments likely would declare bankruptcy, while the cityscapes would become abandoned, somewhat like what happened when Detroit contracted from a city of 1.5 million down to about 600,000 residents.
Mark Giannantonio's Rationale
Of course, it is a bit of a tradition that gaming executives overestimate on their own behalf when making predictions. Gov. Chris Christie famously predicted New Jersey online gambling would make $1 billion a year, when the true figure was about one-eighth that figure, at about $120 million.
In a recent dispute in Massachusetts, a private gaming company and a tribal gaming group had a dispute over whether building an extra casino would lead to greater or fewer revenues for the state government. Each hired a respected gaming analyst group to make a study and file a report. Each of these established research groups came up with diametrically opposed predictions, which just so happened to serve their client. As the old saying goes, numbers can lie.
Truer Than the Truth
That is not to say Mark Giannantonio's numbers are a lie. But it presents a worst-case scenario. The casinos might lose half as many jobs as the Resorts Casino CEO predicts, and that would be a disaster for the city. The quickest way to lose a debate is to overstate your case (or, in some case, call the other side "Hitler"). Gaming executives are no shrinking violets. A certain amount of hyperbole is expected. Attention-grabbing headlines are likelier to attract readers and make an impact. If Mark Giannantonio's numbers are a bit off, he still speaks the truth.
