Revel declared bankruptcy last month after opening just two years ago. Showboat, the hotel next to Revel, will shutter its doors next month.  *MCT photo
Revel declared bankruptcy last month after opening just two years ago. Showboat, the hotel next to Revel, will shutter its doors next month. *MCT photo

Should Bermuda be looking to a particularly rough stretch of the Jersey shoreline for answers about the economic effects of casino gambling?

Ardent casino supporters concede that a casino, if legislation passes and one is built here, would not be a panacea to the island’s economic woes.

“It’z not a total solution by any means,” said Bermuda Tourism Authority CEO Bill Hanbury recently. “It’s an amenity that some guests desire as part of a holiday experience. Should the Government decide to legalize gambling, it must be incorporated into other on island improvements.”

It certainly hasn’t been a cure-all for Atlantic City. New Jersey voters gave the go-ahead to casino gambling in that city — historically renowned for its boardwalk and the subject of a particularly depressing Bruce Springsteen song — in the mid-1970s when crime and unemployment were rife in the city. In 1979, the first casino was constructed. Subsequent casinos brought a revenue windfall, and annual visitors would jump from 6 million to 30 million, according to USAToday. But nowadays, the gambling industry has hit a historical rough patch. USAToday recently reported that casino revenue has declined “almost every month for the past eight years and now amounts to just half of the $5 billion reported for 2006”.

In January, the Atlantic Club closed and with it 1,600 jobs disappeared, according to that paper. Next month Showboat will shutter, which means another 2,100 jobs will fall by the wayside. Ten casinos will still be standing, although some may have to shut or shrink operations, reports USAToday.

Revel, Atlantic City’s newest casino, which opened barely two years ago on April 2, 2012, declared bankruptcy last month for the second time in its short history.

Should Bermuda, which is in the midst of a debate about potentially bringing casino gambling to the island, be worried?

According to one local activist, yes. Jonathan Starling spearheaded a signature-gathering petition drive to put casino gambling on a referendum so that Bermuda voters could have a say in the debate.

Now, he says that the state of Atlantic City’s casino gambling industry “shows a massive flaw in the argument for casino gambling in Bermuda”.

“This highlights why a referendum would be the best way to decide the issue, as it would allow for a more thorough sounding out of the pros and cons,” he said.

 “Those who do want to gamble, well, the model doesn’t even work in the state;, one has to question whether it could work here.”

Tourism Minister Shawn Crockwell, meanwhile, says the current state of Atlantic City’s casinos “shows the importance of maintaining the correct balance when it comes to how many casinos will be viable in a jurisdiction.

“It is clear that in Atlantic City they built too many casinos and now are having a correction,” he said. “Casinos in Atlantic City are still generating significant revenues.” 

Many cite an oversaturation of casino gambling not just in Atlantic City, but on the American east coast as a whole, as chief reason for that city’s woes. Back in the 1970s, Atlantic City had little competition. But now, there are casinos in Pennsylvania, Delaware, Maryland and Connecticut. And the market appears poised to become more crowded: New York state and Massachusetts have also passed legislation that would allow for casino gambling.

Will such a market ovesaturation in the US affect a future casino here? Mr Crockwell, for one, says no. He says the government is unconcerned with new casino developments in places like Delaware and Maryland. 

“Any casino built in Bermuda will be part of an integrated resort that will offer a number of attractions and amenities such as golf, spas, fine dining and so one” he said. “A casino will simply be another of those amenities. The planned new casinos also demonstrate that developers believe there will be demand for their product, which is encouraging for Bermuda.

 “We simply need to ensure we strike the correct balance and do not oversaturate our local market with casinos.”

The island, according to Mr Crockwell, could support three casinos. n