A time few could imagine during the not-too-distant glory days of casino gambling has arrived in Atlantic City, where two casinos are closing this week and a third will shut down in two weeks.
More than 5,000 workers will lose their jobs within a few days in the seaside gambling resort, leaving many feeling betrayed by a system that once promised stable, well-paying jobs.
The Showboat was earmarked to close yesterday, followed by Revel today and tomorrow. Trump Plaza is next, closing on September 16. To the thousands who will be left behind, it still seems unreal.
"We never thought this would happen," said Chris Ireland, a bartender at the Showboat since it opened. His wife works there, too, as a cocktail server. Neither has a job to go to.
What makes it even tougher to swallow is that the Showboat - one of four Atlantic City casinos owned by Caesars Entertainment - is still turning a profit. But the company says it is closing Showboat to help reduce the total number of Atlantic City casinos. Caesars also teamed up with Tropicana Entertainment to buy the Atlantic Club last December and close it in January.
"They just want to eliminate competition," Ireland said. "Everyone's in favour of a free market until it doesn't exactly work for them."
Yet many analysts say the painful contraction now shrinking Atlantic City's casino market is exactly what the city needs to survive. Atlantic City's casino revenue has fallen from US$5.2 billion in 2006 to $2.86 billion last year, and it will fall further this year. Atlantic City will end the year with eight casinos after beginning the year with 12.
New casinos popping up in an already saturated northeastern US gambling market aren't expanding the overall pie but are slicing it into ever-smaller pieces. Fewer casinos could mean better results for the survivors.
The challenges are not unique to Atlantic City. Macau casino operators are in a downturn as they grapple with slowing revenue and rising labour costs that were not expected until next year after years of delivering double-digit growth. For the year so far, share prices for the six casino operators in the world's biggest gaming hub are down an average of 11 per cent.
But it's not all bad news. Resorts Casino Hotel in Atlantic City, on the verge of closing a few years ago, completed a remarkable turnaround in the second quarter of this year, going from a US$1.3 million loss last year to a US$1.9 million profit this year.
"I truly believe that the eight remaining casinos can all do very well when the gambling market is right-sized," said Resorts president Mark Giannantonio.
That may be true, but it is of little comfort to workers who are losing their jobs. By the time Trump Plaza shuts down in two weeks, nearly 8,000 people - or a quarter of Atlantic City's casino workforce - will be unemployed. A mass unemployment filing due to begin on Wednesday is so large it has been booked into the city's convention centre.
When casino gambling was approved by New Jersey voters in 1976, it was billed as a way to revitalise Atlantic City and provide stable, lasting jobs. The first casino, Resorts, opened in 1978, kicking off three decades of soaring revenue and employment. But the great recession hit just as new casinos were popping up in neighbouring Pennsylvania and New York, cutting deeply into Atlantic City's customer base.
"There was a promise when casinos came in here that these would be good, viable jobs, something you could raise your family on and have a decent life with," said Paul Smith, a cook at the Trump Taj Mahal Casino Resort. "I feel so bad for all these people losing their jobs. It wasn't supposed to be like this."
Mayor Don Guardian says his city is remaking itself as a more multifaceted destination, where gambling is only part of the allure. But he acknowledges the pain the next few days will bring.
"This is going to be a difficult few weeks for many of us in Atlantic City," he said. "People will lose their jobs, and that is never good news. Our hearts go out to our neighbours and friends. We still have difficult waters to navigate."