Three Reasons Floridians Should Care About the Plight of Atlantic City

Three Reasons Floridians Should Care About the Plight of Atlantic City

1. It proves that gambling doesn’t help the local economy.

The gambling industry loves to spin the fable that casinos are an economic panacea for communities that are struggling financially. The industry promises that gambling will generate new revenue for local and state government. The truth is, money spent in a casino is simply money not spent in another sector of the economy. After gambling has gained a foothold, local businesses surrounding a casino struggle to stay open. A case in point: after casinos were legalized in Atlantic City, 40 percent of restaurants and one third of the retail establishments there went out of business. In a well-developed economy like Florida’s, gains in the casino gambling industry will come at the expense of existing jobs and businesses.

2. It proves that oversaturation is real and could be headed to Florida.

The expansion of casinos and other venues has resulted in oversaturation of gambling in many regions of the U.S. It’s widely understood that Atlantic City’s problems were caused by a glut of casinos there and competition from new gambling facilities in neighboring states. In fact, according to an Aug. 10, 2014 New York Times article, “more than half the population in the Northeast now live within 25 miles of a casino featuring video lottery, table games or slot machines.”

There are only so many gamblers for casinos to lure, and expanding casino gambling locations causes casinos to cannibalize themselves. Currently, Miami-Dade and Broward counties are home to eight pari-mutuel facilities authorized to have slot machines. There are also seven Indian tribal facilities in Florida featuring gambling options – six in Miami-Dade and Broward counties and one in Tampa.

Now, the gambling industry is seeking approval to build mega-casinos in South Florida, and existing gambling operators in the state want more, too. It never stops.

3. In order for casino companies to grow they must expand into new markets – and Florida is considered a top prize.

In order to maintain their profits, casino companies must continually find new gamblers to lose money in their casinos. In 1988 only two states had casino-style gambling. Today, 39 states do.

Florida’s large population and heavy flow of tourists have always made us a coveted target of casino companies. But expansion of gambling here would threaten our family-friendly brand that is the envy of virtually every other state in the U.S. Several years ago Las Vegas tried to become a family destination and failed miserably. And now, Atlantic City is trying to reinvent its image following an economic meltdown caused by multiple casino closings last year. It’s quite simple: a gambling brand and family-friendly brand are not compatible.

Second ratings agency drops Atlantic City debt to junk bond status

By Ted Sherman
January 28, 2015

ATLANTIC CITY -Atlantic City’s downward financial spiral continued to grow worse this evening, with a second Wall Street ratings agency dropping the city’s debt to junk bond status.

Standard & Poor’s Ratings Services lowered its general obligation rating on Atlantic City four notches to ‘BB’ from ‘BBB+’ and placed it on CreditWatch with negative implications.

The S&P downgrade, which followed a similar action by Moody’s Investors Service last Friday, cited Gov. Chris Christie’s executive order last week installing an emergency management team to take charge of Atlantic City’s finances.

“The implementation of an emergency manager signals to Standard & Poor’s that the state does not view the city as capable of resolving its challenges without outside intervention,” said Standard & Poor’s credit analyst Lindsay Wilhelm. “In our view, third-party intervention is often more draconian than the actions taken to date and has a greater likelihood of being detrimental to bondholders.”

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