Public Investment or Socialized Risk? - Just One More Hand: Life in the Casino Economy (2015)

Just One More Hand: Life in the Casino Economy (2015)

Chapter 7

Public Investment or Socialized Risk?

Government is intimately and intricately involved in the casino gaming industry. When she worked for the New Jersey Casino Control Commission, Bernice spent years on the gaming floors alongside the casino employees. In her crisp navy blue jacket with a triangular patch denoting her as a CCC gaming inspector, she was easily identifiable to casino patrons. Visibility was part of her job, one of the important elements in assuring customers that the games were legitimate. Her keen eyes had to watch everything as she circulated the floor. Who is working where? Are the customers having any problems? Where is trouble likely to break out? During her ten-hour shift, she had to focus on everything.

She would keep meticulous records in a logbook, noting infractions and problems that arose during her shift. Underage patrons who snuck onto the floor and tricked a harried cocktail server into giving them drinks? Call security and write it in the log. A dealer whose key employee license had expired or a compulsive gambler who had put himself or herself on the exclusion list? Walk them off the floor and write it in the log. Accusations of cheating? Escort the accused from the table, consult with surveillance officers and floor managers to review the video, resolve the controversy, and write it in the log. Keep tabs on whether the requisite number of security guards are on the floor. Someone’s missing? Talk to the desk sergeant. Still missing on the second swing around the floor? Write them up in the log.

The other important tool for her job was the keys. In Bernice’s words, “Keys was very important. The keys open everything on the casino floors: all the slot machines, all the doors, anything that had to do with anything with money—period! Because that’s what it was. We oversaw the money.” For example, it was Bernice’s responsibility to let the dealers into the secure room where they picked up their decks of cards at the start of their shifts. And, when she wasn’t walking the floor, it was usually because she was in the count room. Money is picked up from the tables every day; slots less often now that they are coinless. Then, they went to the count room: “Once we’re in and then the doors lock, nobody can come in. We got money on the table, it doesn’t even matter—it could be the supervisor—he wasn’t allowed in there. So then they dump the money, they count the change, they count the bills… . They do all their verifications. The lowest might have been maybe three million [dollars]; the highest fifteen million or more.” The daily tabulations of gaming win in each property, once overseen by CCC inspectors like Bernice, were how the state monitored the take in order to calculate its share. And it prevented money laundering for organized crime. Her work was part of the tight regulatory system that New Jersey had pioneered since the 1970s.

Casino management and their advocates had long clamored for looser regulations in New Jersey, citing the less regulated environments in other states. Regulations, they said, added to costs and costs ate into profits.[1]Starting in the 1990s, these calls for deregulation led to incremental changes. Where once the CCC was involved in managerial decisions such as hours of operation, which games could be offered, how decks were shuffled, and even approving advertisements, its role was gradually curtailed. Then, in the middle of a summer tourist season in 2006, the state legislature and then-Governor Jon Corzine (a Democrat) failed to reach a budget agreement, shutting down the state government. Among the nonessential state employees who could not report to work were the CCC inspectors like Bernice. Without them on the gaming floors, gambling was not allowed, and so the slot machines, roulette wheels, craps tables, blackjack, poker, and other games stopped for three days following the busy Fourth of July holiday. Gamblers headed home. The local economy reeled. The state was embarrassed. And the casinos’ workers and management were united in their furor.

In the aftermath, legislation was introduced that would enable the casinos to self-regulate for up to a week in the event of another budget impasse. Corzine finally got the measure passed in 2008. But this was only the first step. Those seeking to deregulate the industry found a new ally in a former federal prosecutor and self-proclaimed “tough guy” Chris Christie, who took the reins of state government on January 19, 2010. The Republican governor needed no rookie year. He quickly established a seven-person Advisory Commission on New Jersey Gaming, Sports and Entertainment. Its recommended amendments to the Casino Control Act, which passed with bipartisan support in early 2011, transferred most of the Casino Control Commission’s functions to the Division of Gaming Enforcement in the Office of the Attorney General. The DGE became the primary regulator, and the CCC was limited to issuing gaming licenses. Among other reforms, the legislation eliminated the requirement that gaming inspectors be continuously present on the casino floor.

This is how Bernice and over 100 other gaming inspectors came to lose their jobs. According to the CCC’s website, their staff was reduced from 260 to less than sixty with ninety days’ notice; only fifty-six of the displaced workers were rehired by the DGE.[2] Since the casinos paid Bernice’s salary while the state covered her benefits, most of the savings went to the casinos. Minimum staffing levels for security officers, surveillance personnel, and pit bosses were also abolished, facilitating some of the cutbacks discussed in chapter 4. Changes in internal control systems no longer had to be approved by regulators. Bernice questioned the changes: “What happened was that the casinos wanted to take over their own properties… . How can you come in and just rewrite bylaws that have protected the industry and employees?”

Yet at the same time that Governor Christie was championing deregulation and tighter state budgets, he was also continuing public involvement in the industry in other ways. Both northern and southern New Jersey interests wanted to turn around the economic engine that was Atlantic City. Governor Christie executed a power grab that increased state rather than local control over the industry and Atlantic City, as well as a massive, $261 million bailout for the floundering Revel project, both described in this chapter. The Revel subsidy was listed as one of ten “megadeals” in New Jersey tracked by the national advocacy organization Good Jobs First. Like many of these handouts provided by state governments, the Revel project did not lead to the quantity or quality of jobs promised in advance.[3]

In fact, Christie has presided over what the Trenton-based research institute, New Jersey Policy Perspective, has termed “a surge in subsidies.”[4] Such active involvement in support of the private sector should not be surprising. When competition intensifies and profits diminish as an industry becomes saturated, businesses frequently look to government. Despite the rhetoric of conservative politicians and the economists whose work they cite, government involvement in markets is ongoing. It just takes different forms depending upon who is in charge.

Public policy makers are as much a part of casino gaming as Bernice and her fellow regulators were part of the casino’s day-to-day operations. The market for gambling is a state creation. The industry could only develop and flourish by chipping away at longstanding prohibitions against legalized gambling. Back when the New Jersey Casino Control Act was enacted in 1977, gambling—whether legal in Las Vegas or illegal everywhere else—was associated with organized crime. New Jersey’s highly regulated model of casino gaming helped legitimate the industry nationally, making it safe for Wall Street and the rest of the country. Regulating casinos was thus integral to the normalization of gambling. Planning was as important as entrepreneurship in the expansion of casino gaming. To this day, state governments promote as well as regulate the industry, sometimes combining both functions within the same agencies—a troubling practice.

Casinos, like many other businesses, also benefit from public involvement through infrastructure development. Many of the Casino Reinvestment Development Authority (CRDA) expenditures benefit the casinos directly, by underwriting construction projects, or indirectly, by attracting tourists with more non-gaming amenities. Recent economic development investments listed on CRDA’s website include a Visitor’s Welcome Center, Boardwalk revitalization, and shopping complexes such as the Walk urban outlet mall and the Pier Shops at Caesars (an upscale mall built on a former amusement pier that is filled with national retailers and designers, as well as restaurants and a food court).[5] Direct assistance to the casinos by CRDA includes new hotel towers to draw conventions and expanded non-gaming facilities in the casinos themselves. Such projects dovetail with the product differentiation strategy designed to remake Atlantic City.

Development subsidies are another means of encouraging local economic development. Development subsidies are defined by the advocacy group Good Jobs First as “cash, tax breaks, and in-kind benefits given to companies to offset the costs of opening or expanding a new facility.”[6] The often well-intentioned objective of development subsidies is job creation, paid for through tax expenditures (forfeited tax revenues). Revel is not the only casino to benefit. Following the fanfare over the Revel development subsidies, both Resorts ($5,055,556) and Harrah’s ($24,128,000) were quietly awarded Economic Redevelopment and Growth grants in 2012, according to the New Jersey Economic Development Authority website.

Government nurtured the industry to meet particular public purposes—not simply to generate profits for shareholders. In exchange for these various forms of public support, the casinos are supposed to benefit the community by providing good jobs, bringing customers for local businesses, and using local vendors. But, as documented by Good Jobs First, development subsidies, including those provided to the casinos, are rarely transparent, lack binding requirements or “clawback provisions” if rosy job creation projections are not met, and are seldom subjected to rigorous cost/benefit analysis. They redirect funds away from public goods and usually go to large businesses with lobbying power rather than small, local businesses.

In addition, the casinos provide tax revenue to the state and local governments. The appeal is that such taxes are supposed to draw revenue from outsiders rather than state residents. For this reason, many of the first states to legalize gambling positioned casinos near their borders or in tourist havens like Atlantic City. The taxes are also portrayed as voluntary because they impact those who choose to gamble.[7] New Jersey assesses an 8 percent gross gaming revenue (GGR) tax, paid every Monday. The state also assesses casinos 1.25 percent of GGR to be directly invested in CRDA-sanctioned projects or to be deposited with CRDA to purchase CRDA-sponsored bonds.[8] These rates are far lower than most states with commercial casinos. Remember the “pay luxury tax” square between Boardwalk and Park Place, in the Monopoly board game? New Jersey casinos must also charge a luxury tax of 9 percent on show admissions and hotel rooms and 3 percent on alcoholic drinks, on top of the 7 percent state sales tax. However, the state caps the combined rate at 13 percent, cutting their sales tax accordingly. For example, a concert ticket in Atlantic City would be subject to the 9 percent luxury tax, so the state sales tax would be reduced to 4 percent to meet the cap. There are also hotel room occupancy fees (1 percent), hotel parking fees ($3 per day, mostly to CRDA), and a tourism promotion fee ($2 per day for casinos, but $3 per day on comped rooms). In 2013, the casinos and their patrons provided the State of New Jersey with over $200 million in gaming taxes, another $100 million in sales and luxury taxes, and about $54 million from the various fees.[9] The city and county governments primarily derive revenue from property taxes, but the assessments on casino properties have been declining.

While the casino industry has a distinctive relationship with government, most businesses benefit from public investments, are subject to regulations, and provide tax revenue, jobs, and other social benefits. Debates among economic analysts are frequently portrayed as dueling ideologies between those who believe that free markets allocate resources efficiently and those who think that the imperfections of real-world markets require some limited government intervention. Intervention is a telling word. It implies that private-sector market mechanisms can and do operate independently of political and social structures—that government is an external force that we can choose whether to unleash. Political economists frequently point out that this depiction is nonsense. Drawing upon the work of Karl Polanyi, political economists assert that markets are, in fact, generally produced by and through government action.[10]

Many businesses, in fact, rather than championing free markets, look to government to shield them from the harsh realities of competition or to assist them in externalizing their costs of production. For example, patents and copyright protection give people or companies property rights over their innovations, limiting the ability of others to produce similar products. Businesses are protected by police and firefighters, hire employees often educated by public or charter schools, utilize public roads to transport goods and customers, and rely on the courts to enforce contracts. Government programs that clean up pollution from factories or that augment low incomes of the working poor can be said to socialize the costs of production. Saying that such policies constitute government involvement in markets does not make them wrong. Instead, we need to recognize that such “rent-seeking behavior”[11] is part of the normal course of doing business for many firms, especially large corporations. Equally endemic to markets are the demands on government by workers to protect them from economic instability with a social safety net and boost their bargaining power via low unemployment rates, collective bargaining rights, and other means. Despite the rhetoric of free markets, “every facet of the economy is shaped by policies that could easily be altered,” according to Dean Baker of the Center for Economic and Policy Research.[12]

In his book The Predator State, James K. Galbraith takes the argument a bit further. He argues that principled small-government conservatives did once exist. In recent years, however, they have been largely supplanted by those who espouse a laissez-faire ideology but are, in fact, engaged in predation. Predation, in his words, is “the systematic abuse of public institutions for private profit or, equivalently, the systematic undermining of public protections for the benefit of private clients.”[13] He contrasts predation with the productive relationship between the public and private sectors in the mid-twentieth century when his father, John Kenneth Galbraith, was an advisor to President John F. Kennedy. James Galbraith attributes the evolution to an institutional shift away from corporations run by their managers to an economy of holding companies owned by private equity and other investors focused on short time horizons. Firms have become commodities to be bought and sold for quick profits rather than just sites for the production of commodities. The new financial capitalists, he asserts, are more interested in capturing the state to line their own pockets than in limiting its scope.

Whether we view socialization of costs as a mainstay of market economies or predation as indicative of a new phase, political economists point out that we need to distinguish public policy initiatives that advance the broad public interest of a variety of stakeholders from those that primarily benefit just a handful of “vested interests” (a term popularized by institutional economist Thorstein Veblen). The relationship between the privately held casino industry and public sector governance is, therefore, complex. At times the investment of public funds appears to be mutually beneficial, to advance the public interest. We can understand why politicians in Atlantic County and throughout the state have scrambled for ways to prop up the industry. Other motives, however, can complicate the picture. Corruption is, of course, always a concern, and has a long history in both the state and the city. But a cozy relationship between political and business leaders can also inadvertently distort policy makers’ perception about whether and when business interests and the public interest are in harmony. For this reason, it is critical that economic development strategies are transparent and accountable.

Further, as state and local governments have seen their coffers diminish—especially during the Great Recession and anemic recovery—generating revenue from casino gaming has become more of a priority. In some cases, this has meant greater complicity with cost-cutting strategies as desperate measures to keep the casinos’ doors open and tax revenues flowing. Deregulation has assisted with the process.[14] Unfortunately, as we have seen, cost-cutting measures displace the goal of creating good jobs. Economic development, as we have noted, requires incomes that circulate through the local economy. Our concern is that specific aspects of the 2011 overhaul of New Jersey casino gaming, outlined in this chapter, have either intentionally or unintentionally undermined the goal of generating sustainable livelihoods for casino employees and their families.

The complexity of private versus public interests in the casino gaming industry is not unique to New Jersey. For example, New York governor Andrew Cuomo cited both jobs and tax revenues in 2013 as he sought to expand gambling in his state from racinos and tribal casinos to full-fledged casino resorts. According to a New York Times reporter, Cuomo advocated casinos in upstate New York as a “bold move to bring jobs and tourism to economically depressed regions.” Yet at the same time: “Mr. Cuomo has already used the prospect of expanded gambling to find more revenue for the state, brokering three recent deals with Native American tribes to settle longstanding contract disputes and other issues. The deals, most recently with the Seneca Nation, will bring the state hundreds of millions of dollars in revenue-sharing from the tribes in exchange for geographic exclusivity.”[15]

On the other hand, cities and states expecting big payoffs may be as disappointed as any novice gambler. A set of empirical studies by Douglas Walker, summarized in his book Casinonomics, found, to his surprise, that casinos had no positive impact (and possibly even a negative effect) on state revenues. In order to capture potential substitution effects (the fact that money spent on gambling could have been spent on other taxable activities if casinos were not available), Walker focused on total state revenue (minus federal contributions) in all fifty states from 1985 to 2000; he measured the impact of the volume of gambling on revenue, controlling for other relevant factors. The model, as he notes, lumps together states whose gaming industries are at very different stages of development and that have drastically different tax rate structures on gaming activities, so his findings are not definitive. Walker concludes, “Our results show that casinos may be ineffective or counterproductive in the long run in terms of tax revenue generation… . Legalized gambling may not always be the ‘golden egg’ that it is sometimes promoted to be.”[16] This is particularly true as casino gaming proliferates; the goal of taxing tourists in lieu of one’s own citizens is more and more elusive when people gamble close to home.[17]

Recently, casinos seem to be appropriating resources from public coffers. For example, Atlantic City borrowed a reported $250 million over a three-year period in order to refund property taxes to some of the casinos after losing assessment appeals in court. The assessments on casino properties are based on how much income they generate; as their revenues have plunged, the rates set back in 2006 are much higher than current conditions would warrant. Most of the casinos have filed appeals and have been granted refunds and/or credits against future taxes, lowering the city’s tax base by over one-third. Closure of the Atlantic Club intensified the problem. The casino abatements have devastated the city’s fiscal position, leading to a bond rating downgrade. They have also drastically increased residents’ and small business taxes, and rippled outward to raise county tax rates in surrounding communities.[18] And this does not include the tax expenditures for the Revel project by the state.

Once again, it seems that Atlantic City’s experiences foreshadow trends elsewhere. Just down the interstate in Delaware, for example, Governor Jack Markell was announcing an $8 million “temporary” bailout of that state’s three casinos. The justification for the bailout was the financial squeeze felt from high taxes and increased competition.[19]

Only two weeks after assuming office in 2010, Governor Christie issued Executive Order No. 11, appointing a seven-person Advisory Commission on New Jersey Gaming, Sports and Entertainment. It kept no minutes or records of its meetings, prompting some groups to accuse the commission of meeting in secret and violating the state’s open-records act. By late July, the commission had issued a short, twenty-nine-page report, calling for a complete overhaul of New Jersey casino gaming, horse racing, and relevant entertainment. Governor Christie accepted their recommendations the following day. These included the restructuring of the regulatory agencies and elimination of regulations described above, along with a five-year moratorium on racinos or casinos elsewhere in the state, meaning that there would be no slot machines or video lottery terminals (VLTs) at the two state-owned racetracks: the Meadowlands and Monmouth Park. This was a win for southern New Jersey over northern New Jersey. The stated objective was to bring Atlantic City back to economic health as a tourist destination first, before entering the convenience gambling market in the northern part of the state.

The win came at a price, the erosion of local control. The transfer of regulatory power from the relatively independent Atlantic City-based Casino Control Commission to the Division of Gaming Enforcement was part of the picture. When it was established, no more than three of the five members of the CCC could be from a single political party; it was to be “in, not of, the Department of Treasury.” Praising New Jersey’s approach several years before it was dismantled, Atlantic City attorney Nick Casiello Jr. argued that this design was “to ensure the greatest possible independence from political influence.” In contrast, he observed, “since the Office of the Attorney General reports to the Governor, the Division is not as structurally isolated from influence as the Commission.”[20] The number of commissioners was whittled down to three through attrition in 2010, and remains at this smaller size commensurate with its diminished duties.

A self-described senior policy advisor from the office of Governor Christie’s chief of staff assumed command of the DGE. In a 2012 interview, Director David Rebuck outlined his vision for the agency as looking out for the industry’s interests, saying, “But, the big picture is—and it’s what I always ask the industry: What do you need to compete and succeed in this new environment? It’s my goal to know what that is and to help them get that done in a way that ensures integrity and public oversight.”[21] His attitude reflects the conflation of two responsibilities: regulation and promotion. DGE career staff members, meanwhile, are diligently assuming their new assignments and attempting to be responsible guardians of the public trust. The casinos do not always get their way; Trump Plaza was rebuffed by the DGE when the casino requested permission to completely close its table games for part of the overnight shift on weekdays.

A far more sweeping and controversial recommendation called for placing Atlantic City’s casino and entertainment district under state authority. The proposal essentially took part of the city away from Atlantic City’s elected leaders. Governor Christie did not mince his words in his official announcement: “Atlantic City has had a historically corrupt, ineffective government.”[22] He added that he wanted a clean and safe tourism district. The governor called for all public hearings, consultations, and legislative debates to be completed within a year, proclaiming a deadline of July 1, 2011.

The movers and shakers influencing the direction of Atlantic City and the New Jersey economy had concluded that bigger and better casinos were necessary but not sufficient for a turnaround. Despite the growth of tourist amenities, the city itself continued to have a tarnished reputation. People perceived crime as a problem, regardless of what a careful reading of crime statistics actually showed.[23] People blamed the images of urban poverty in surrounding neighborhoods for discouraging visitors. One way to read these complaints and the ultimate response is that a racially diverse city with a local government largely in the hands of African American political leaders was incompatible with the upscale image that Atlantic City sought to project. In the words that open the master plan eventually developed to implement the governor’s vision, the tourism district was “intended to create a vision for changing perceptions of Atlantic City.”[24] While insisting that they wanted to work with the governor, many—though certainly not all—local city officials remained skeptics. In fact, there was considerable unease between then-Atlantic City Mayor Lorenzo Langford and Governor Christie throughout much of the reform planning. At one point during the turbulent year of negotiations, the mayor alleged that the governor promised a partnership with the city and then broke his promise. Mayor Langford even threatened to sue the state over its Atlantic City plans.[25]

The first sketch of a conceptual map for the newly proposed state district was published in the Press of Atlantic City on July 22, 2010, coinciding with Governor Christie’s announcement. It included noncontiguous sections of the city around the casino hotels such as the shopping and restaurant area known as the Walk and parts of the city’s marina. Leaders took care not to use the word “takeover” and instead referred to the Atlantic City restructuring as a “private-public” partnership. The semantics—word choice and word order—are important. Democrats such as Senate President Stephen Sweeney, who initially opposed a “state-controlled” district, eventually warmed to the idea when phrased as a partnership.[26] The governor and legislature just disagreed on exactly which public entities should be in partnership with which private partners. But the phrase also sidestepped the important question of why the state has the right to override local democratic governance institutions. As one local resident complained, “The people in this city have less and less to say about our city and what happens in it. We don’t have the ability to say anything anymore.”[27]

The bill to create a state-run tourism district (S-11) passed with even more support than the bill (S-12) to ease state regulation of gaming. Governor Christie signed the landmark legislation package on February 1, 2011, at the construction site of the Revel, hoping to spur financing of the casino and economic development in the casino’s South Inlet neighborhood. While technically contiguous due to the designation of particular streets and the Boardwalk as part of the district, the shape of the final map of the tourism district is more convoluted than a gerrymandered political district.

The legislation technically transferred control over this oddly shaped district to the Casino Reinvestment Development Authority. Democrats, especially local State Senator Jim Whelan, forced Christie to acquiesce to giving administrative authority to the preexisting agency rather than creating a new public-private venture. Christie did, however, manage to force out the executive director of CRDA and install some new appointees.[28] CRDA was granted broad powers: “jurisdiction to impose land-use regulations, implement development and design guidelines and implement initiatives that promote cleanliness, commercial development and safety, undertake redevelopment projects, and institute public safety improvements in coordination with security and law enforcement personnel. CRDA also has jurisdiction over the rules and regulations affecting the control and direction of traffic within the Tourism District, has approval authority of road projects, and has the right to exercise eminent domain.”[29]

In short, governance of a large swath of the city is now in the hands of an entity whose seventeen-member board of directors includes fourteen seats appointed by the New Jersey governor, plus the state treasurer, the state attorney general, and lastly, the Atlantic City mayor. Two of the gubernatorial appointees are designated for representatives of the casinos. In our interview with Zoe, the fifty-something cocktail server whose parents optimistically worked on the 1978 initiative, she voiced the concerns of many locals: “I’m fearful of that because [of] who’s running our state now. It’s worrisome for me.” A union activist at a Caesars-owned property, she made an analogy between the state government and the private equity interests running her workplace: “They [TPG and Apollo Management] wanted to make money for themselves to suck it out to take it somewhere else to the next capital gains that they could make. Is the state going to do the same thing? Are they going to take everything they can get out of Atlantic City and move it up to where most of the wealthier Jerseyites are? I don’t know. I’m fearful of that. I don’t have faith.” By blaming local government for Atlantic City’s problems, attention was being diverted from the impact of the national macro economy, the way social problems like crime were exacerbated by gambling and tourism, as well as longstanding structural problems such as eroding tax bases facing many local governments.

Atlantic City has always been a divided city, but now it is official. The state cherry-picked the areas it wants to control, essentially ignoring the poorest residential communities in the city. The geographic and fiscal division evokes images of racial segregation. The casinos, casino hotels, and other major tourist attractions are in a district run by an administrative entity of the state. The rest of the city, largely poor and African American, remains in the hands of the municipal government and the mayor. That Governor Christie, who appointed the advisory commission to develop the plan, is white and then-Mayor Langford is black increases the appearance that this takeover has similar racial politics to other recent cases where state leaders have usurped power from local governments in largely African American cities to further economic interests.

One prominent case study that has attracted more national media attention is the story of Benton Harbor, Michigan.[30] The corporate home of Whirlpool Corporation, Benton Harbor is a once-prosperous and racially mixed city on the eastern shore of Lake Michigan, abandoned by most everyone except a core of African American citizens. The last Whirlpool plant in Benton Harbor closed in 1987, though a corporate headquarters remains. The state takeover was executed under a 2011 (Michigan) Emergency Manager Law. State-appointed Emergency Manager Joseph Harris is, in the words of a New York Times reporter who wrote a profile of the controversy, “[b]lissfully free of the checks and balances of democratic government.” The use of an emergency manager was coupled with a scheme that corporate, state, and some community leaders promised would revitalize the local economy: a luxury golf resort surrounded by hotels, shops, and new housing. Part of the land came from what had long been a public park. Some of the financing drew upon public funds channeled through nonprofits in a public-private partnership. But “Harbor Shores” has not drawn the wealthy Chicagoans and other upscale customers it was supposed to bring, and the development process stalled. Benton Harbor is viewed by progressives like MSNBC analyst Rachel Maddow as a harbinger for national trends. It certainly seems to have been forged in the same fire as the tourism district scheme for Atlantic City.

A 2013 study by the Pew Charitable Trusts identifies nineteen states that have laws permitting states to intervene in financially distressed local governments.[31] The report is generally favorable about the need for state governments to assist older cities whose economic and fiscal base has weakened. However, Pew is concerned about the ad hoc nature of the grounds and process for state involvement. The range of interventions pursued by various states can be mild or aggressive, including such measures as debt restructuring, renegotiating labor contracts, raising taxes and fees, providing emergency financing and technical assistance, or, in a few states (including Michigan), dissolving or consolidating the local government entirely. The report briefly acknowledges that local governments often resist such financial oversight, but asserts that fears about “the usurpation of democracy” can be allayed by engaging “stakeholders.” The unspoken assumption is that the state or its appointed representatives are somehow better able to make the hard choices. In response to the Atlantic City takeover, however, historian David Schwartz, director of the University of Nevada-Las Vegas Center for Gaming Research (he was born and raised in Atlantic City) observed, “You’re taking away control from the local government. But it’s possible that the state won’t be more efficient than local government.”[32] For this reason, citizens should be wary of aggressive intervention measures such as those in Atlantic City and Benton Harbor.

In a dramatic election upset in November 2013, white Republican Don Guardian beat incumbent mayor Langford. As a socially liberal and openly gay Republican who campaigned heavily in immigrant and African American communities, Guardian was able to draw votes and support from diverse constituencies who usually vote Democratic. Guardian was, at the time of his election, executive director of a former nonprofit called the Atlantic City Special Improvement District that worked with local businesses on beautification projects; CRDA had absorbed the Special Improvement District as part of the tourism district plan. Guardian’s victory in the mayoral race was helped by the perception that he would be better able to work with the state authorities and casinos. Interviewed by the local press on the third anniversary of the takeover, State Senate President Stephen Sweeney suggested that Guardian’s election may have forestalled the state from further increasing its oversight of city governance.[33] And better relations with the state matter: The new mayor immediately sought state aid to help offset the fiscal disaster wrought by the declining tax base and abatements to casinos.

Whose interests were served by the takeover in Atlantic City and at what cost is still an open question. It is early to assess the concrete impact of the takeover, especially since the transition faced numerous initial delays. As a first step in taking control of the district, CRDA was responsible for producing a master plan. After issuing a Request for Proposals (RFP), the work of preparing this plan was outsourced to a team that included Jones Lang LaSalle, a global real estate services firm; the Jerde Partnership, an architecture and urban planning firm; Birdsall Services Group, public engineers; and Hill Wallack, a Princeton-based law firm. The master plan that they produced articulates three phases of development, essentially reviving and expanding the same concept of a destination resort for more than gambling that was sidetracked by the Great Recession. As in Benton Harbor, the grandiose plans seem to be a boon for real estate developers and the construction trades.

Some of the practical results of CRDA’s administration of the tourism district have been increased funds for policing and increased frequency of street cleaning—echoing Christie’s emphasis on a clean and safe place for tourists. A 2012 CRDA annual report proudly discusses its efforts to create a walkable city, including facelifts for the facades of buildings and landscaping.[34] Major building projects have been undertaken or are in the works. Meaningful changes have been slow, however, and come nowhere near offsetting the decline in living standards for casino employees wrought by cost-cutting measures and casino closures.

The master plan publically declares a vision of a “total and diversified city for all seasons, for all ages, and all social classes.” There is evidence, however, that the poor are not truly welcome in the tourism district. Reading the CRDA annual report more carefully, one can find a nebulous reference to the need for “specific attention to the City’s density of social service issues” and “relocation efforts.”[35] These refer to an initiative to move critical nonprofit social services such as the Atlantic City Rescue Mission, a soup kitchen, and an addiction recovery center out of the walkable district. The Christian-based rescue mission is the largest shelter in the state, and serves as a magnet for homeless from surrounding towns and counties. In addition to beds, the mission serves around 700 meals per day, offers a medical clinic and mental health services, and provides work-readiness programs. Some locals complain that social service agencies in surrounding communities practice “Greyhound therapy,” meaning they give patrons bus tickets to Atlantic City. Officials, including the governor, are on record as saying that providing these services is incompatible with revitalization of the tourism district. CRDA has even pressured the mission and other local charities to require the homeless to undergo a centralized registration process in an Atlantic County office building before being allowed access to any of their charitable services. When the president of the mission resisted turning away people on their doorstep, the mission’s Board of Trustees ousted him.[36]

Under the heading “Removing Blight,” the 2012 annual report lists thirty-seven sites identified for demolition and twenty-nine buildings demolished. CRDA has been taken to court over the use of eminent domain to usurp property and to condemn two public housing developments. In their place, CRDA is envisioning mixed use projects (housing and retail complexes), including one in the neighborhood surrounding Revel.[37] The Boraie project’s rental units were predicted to lease for at least $1,000 per month, save for 20 percent of the units mandated as affordable housing.[38] The undermining of local democratic control over the form that economic development will take in Atlantic City’s future seems to have led to displacing the poor and lower-income residents who have called the city by the sea home—the classic dynamic of gentrification.

Governor Christie signed the two laws overhauling the casino industry and creating the tourism district in Revel’s yet-unfinished shell. On the same day, the state Economic Development Authority (EDA) provided the spark that led to the much-anticipated opening of the new casino in the summer of 2012.

The idea that Revel would somehow be a “game-changer” or “save” Atlantic City persisted during the years leading up to completion of the project. Revel’s signature was more than its anticipated size, originally projected at 4,000 rooms and 7,000 parking spaces.[39] Revel was designed to amplify industry trends by marketing itself as a luxury resort that happened to have gambling rather than as a casino. The word “casino” was prominently absent from the property’s name. Every one of the deluxe rooms would have an ocean view. Keith, who works two casino jobs, one of them at Revel, told us that he admires the vision: “The concept was to bring back to Atlantic City the upper crust, the millionaires, focus on non-gaming.” As discussed in chapter 3, targeting upscale consumers was the strategy that drove the Borgata’s success and is well suited to an era of spiraling income inequality. It is also an appealing counter-move against those who decry casinos for preying on low-income customers.

Wall Street financial giant Morgan Stanley initially acquired the site adjacent to Showboat in 2006 and plans were quickly developed to construct a megaresort and develop the surrounding area. However, once the U.S. financial bubble burst a year later in 2007, the project encountered major obstacles in securing financing from private or public sources. Morgan Stanley, reeling from the escalating financial crisis, dropped out of the project and wrote off around $1 billion in losses. Revel Entertainment Group CEO Kevin DeSanctis scrambled to keep the project alive for years, even as construction completely halted in 2010. State legislators exerted considerable political pressure, although some local political actors—including Bob McDevitt, the president of the largest casino workers union—expressed concerns that Revel would simply crowd out existing casinos rather than create new jobs.[40]

Despite these objections, the Christie administration came to the rescue. An Economic Redevelopment and Growth grant from the EDA allocated $261 million in tax breaks over twenty years in order to help Revel Entertainment Group secure financing for the project. A substantial portion of the funds was to be designated toward economic development projects intended to gentrify the South Inlet neighborhood around the resort. The tax breaks would only take effect once the resort opened its doors for business. Tax breaks in hand, financing was secured and construction resumed.[41] Creating jobs was a reason for the tax breaks, including a promise to hire some city residents; but shortly before it opened, Revel announced that almost 40 percent of its workforce would be part-timers.[42]

And so the resort opened with great fanfare during the summer of 2012. Beyoncé (Knowles) performed the first four shows in the new concert venue, including one attended by First Lady Michelle Obama with her daughters, Sasha and Malia Obama. Other celebrities mingled with throngs of visitors and curious locals. What they found was a glistening package. As described by one blogger:

Revel is trying to lure people who want to go to a nightclub (there are three, including a burlesque club), see a concert (Beyoncé just added a fourth show in May), bask in a spa (this one is 32,000-square-feet and has a co-ed bath house), swim or surf at the beach (now being replenished by the Corps of Engineers), or lounge by a pool (with cocktail girls and pool boys with misting bottles). They want people to visit their 14 restaurants and “curated collection of Iron Chefs, Michelin chefs and James Beard Award winners.” Instead of gaming credits or slot dollars, they’re offering a $30 “tasting credit” toward foodie-friendly eats as part of their preview package. Gone are the bland buffets, replaced by trendy tapas, “food truck” style tacos and churros (with spicy Valrhona chocolate dipping sauce to help ease some of those losses at the blackjack table), Belgian beers, and a “1920s-era zinc cocktail bar.”[43]

Yet even at a total cost of $2.4 billion, the property that opened was scaled down from the original vision. To get the tax breaks, they had to open. One tower with slightly under 2,000 rooms was built instead of the original two, and some of the interior floors were not completed. The beach area in front of the hotel, renamed “Revel Beach,” was unfinished and marred by construction cranes.

The flashy opening attracted a media blitz that soon fizzled out. The casino floor itself was relatively small because high rollers gamble in more secluded spaces. The layout of the property made it difficult to find things, unlike at Borgata, where shops and restaurants are laid out in a circle surrounding the casino floor. The size and multi-level design presented structural difficulties for seniors and others with limited mobility.[44] There were no affordable food and beverage options. Even chef Jose Garces’s taco truck was costly. Pondering the menu at one restaurant, a patron complained to a reporter, “I’m not getting that [a $30 lobster burger]. That’s completely out of my price range.”[45] The entire Revel property was smoke free—a radical departure from the common industry assumption that addictive personalities both gamble and smoke cigarettes. DeSanctis was proud of bucking conventions, confiding to one reporter, “I think smoking is so yesterday.”[46]

In their effort to appeal to wealthy overnight guests who didn’t regularly gamble, Revel management made middle-income day trippers feel unwelcome and intimidated. Casino regulars and even locals related that the place was stuffy. When the initial revenue numbers indicated that Revel ranked eighth out of the twelve casinos in gaming revenue in its early months, more and more observers began to doubt that the project would live up to its hype. (Measured by GGR, Revel hovered in the lower third of the Atlantic City rankings throughout 2012 and 2013.) Within six months, adjectives used to describe Revel included “lackluster, disappointing, underwhelming, and even abysmal.”[47] Seeming to confirm the concerns of labor leaders that Revel would simply cannibalize gamblers from other properties rather than grow the Atlantic City market, DeSanctis admitted in July 2012 that gambling is a “market-share game.” Yet he continued to defend Revel’s three-prong demographic approach—gamblers, conventioneers, and leisure-seeking tourists—maintaining that its success would be grounded in the third group.[48]

Revel was also offering a different kind of labor-management relations than its predecessors. The casino refused to sign the pattern contract with Local 54 or even to recognize union representation for its hotel and restaurant employees. All frontline employees are offered short-term appointments of four to six years, and are expected to reapply for their jobs, competing against other candidates, at the end of each cycle. The lack of job security makes it difficult to buy a home, take out a car loan, start a family, or plan for the future. Almost immediately after it opened, Local 54 began a quiet campaign to organize the Revel staff. Sympathetic employees were identified and they began to talk union with their coworkers. The process was initially slow, but critical. Labor leaders feared the example of a union-busting Revel might inspire other casinos to take a more aggressive stance.

Total Atlantic City casino employment rose temporarily when Revel opened, but the numbers fell off again after the initial opening summer. The property never delivered anywhere close to the promised job creation. By October of the same year, Revel had lost over $110 million, measured as gross operating profit. Borgata, number one in operating profit in 2012, earned roughly the arithmetic reverse, or $119 million. DeSanctis started looking for an additional infusion of credit. Though Revel, the casino that was supposed to help save Atlantic City, was struggling, the venture was not a complete failure. What Revel did for the industry was help boost hotel room occupancy, measured in room nights booked/occupied. It also helped increase sales by third-party restaurants, owned independently from the casino properties. These successes increased luxury and sales tax collections.

Still, less than one year after opening, Revel filed for bankruptcy. CEO DeSanctis was ousted. An interim crisis team was brought in to usher the property through bankruptcy. Revel emerged from bankruptcy protection under a new ownership structure, a holding company owned by the casino’s creditors. A key stake in this holding company (28 percent) is held by hedge fund Chatham Asset Management; the CCC awarded Chatham a license to operate the casino in June 2013. The State Investment Council subsequently approved a controversial $300 million investment of public sector pension monies in Chatham. To avoid state pension money being indirectly invested in Revel, Chatham is supposed to be divested of its shares of the casino before this investment is implemented. According to news reports, New Jersey Treasury Department staff told the Investment Council members who questioned the investment that “they expect Chatham to be out of Revel by the time the state provides the money.”[49]

The resort switched decks following the bankruptcy reorganization. One of the first things to be tossed was the no-smoking policy. Revel reversed the ban as it opened for the 2013 summer season over Memorial Day weekend. The new head of marketing said even his mother complained about the smoking ban; quoting his mother, he claimed “It doesn’t feel like a casino unless you smell smoke in the air.”[50] Outside observers had jumped on the smoking ban as a key reason for the casino’s problems, but the employees we spoke with who actually work there (both nonsmokers) disagree. In his interview, Keith, a part-time waiter, told us that “what I remember is guests saying to me ‘This air is remarkable.’” Isiah, a dealer at both Borgata and Revel, thought that management did not promote the benefits of the smoke-free environment aggressively enough. He felt that people could get used to smoke-free casinos just as they have adjusted to smoke-free restaurants. Looking for a quick fix and a symbol that they wanted middle-income gamblers, Revel made room for the largest contiguous smoking section of any Atlantic City casino, 30,000 square feet.[51] What an about-face.

Another high priority was to cut costs in all areas, from big-ticket items and staffing to supplies. For example, Revel successfully renegotiated its tax assessment to $1.15 billion, only half of the $2.4 billion construction cost. Other cost-cutting measures followed. Keith noticed a drastic decrease in the number of security staff patrolling the floors and other reductions in service. Isiah indicated that many of his full-time coworkers were offered a choice between losing their jobs (with some kind of severance package) or being “demoted” to part-time status. The company announced that it was stopping contributions to employee 401(k) accounts in August 2013.

The property was also renamed the Revel Casino-Hotel. “If you want gamblers to feel wanted, then you need to let them know you’re a casino,” said Randall Fine, a representative of the Las Vegas firm charged with marketing the new brand.[52] An aggressive campaign sought to attract gamblers from across the northeast region. A new billboard for Revel along the Atlantic City Expressway proclaimed simply, “Gamblers Wanted.”

It might have said “Buyers Wanted.” As of 2014, the property was once again for sale. Employees’ jobs were threatened. Revel’s hotel and restaurant staff, however, had a card to play. The organizing campaign went public. Local 54 started a media campaign advocating speedy union recognition in order to protect jobs and avoid another wave of job losses like the ones when Sands and Atlantic Club closed. Without a contract, the hotel and restaurant workers would not have the same protections as their compatriots in other casinos, the protections described by Keith in the opening of chapter 6—job security, but also access to health benefits and a pension. The employees voiced fears that a new owner could suspend operations during renovations, laying off most of the staff and forcing them to reapply for their positions. Dealers like Isiah had no similar recourse. He fretted about the possibility of losing his job. Although it was only one of three jobs he and his wife held, they needed the income to support their family.

Revel Organizing Campaign Flyer.
Source: Local 54 of UNITE HERE

Public pressure was applied to political leaders and state administrators to lean on Revel’s managers to recognize the union and preserve jobs. The State Investment Council, Local 54 argued, could exert its leverage over Chatham (Revel’s largest shareholder). Local 54 President Bob McDevitt observed, “From the outset, the state has justified its interest in Revel with the promise of jobs, but has shown little regard for the workers who filled those jobs, or for the workers who lost their jobs, in part, due to Revel’s unwelcome contribution to overcapacity in the Atlantic City market.” Some political leaders from both parties agreed that the state needed to monitor the sale, if only by using the remaining licensing power of the CCC, in order to prevent another wave of job losses.

The internal organizing combined with public pressure was partially effective. The hotel and restaurant employees overwhelmingly voted for union representation in an election held in June 2014: approximately 80 percent in favor. In a press release issued by the union, a Revel employee said, “I want the same job security and benefits for me and my son that Local 54 members have.”[53] Revel president Scott Kreeger agreed not to contest the election. Negotiations would be in conjunction with the other ten casinos since the Local 54 contracts expire at the same time in September of 2014. However, the Revel employees—both unionized and nonunion—still face an uncertain future. Shortly after agreeing to recognize the union, the casino entered Chapter 11 bankruptcy for the second time and was put up for auction. Without an imminent buyer, the casino was slated to close before contract negotiations started, meaning Keith, Isiah, and their coworkers would have no job protection.

So what did the state get in exchange for its assistance to Revel? Had its innovative model been successful, public intervention to facilitate financing and sacrifice of tax revenue could have been defended as an investment in a less gambling-centric future for the city. Twenty years of tax credits might be a steep price, but the Revel hype promised to return Atlantic City to its former glory as a tourist destination. The reality is that Revel has not redeemed or rejuvenated tourism in Atlantic City. Instead, it seems to be a case study of taxpayers assuming economic risks for a private venture—one that lowered job quality standards instead of creating good jobs. Ironically, while CRDA takes aim at blight in the community surrounding Revel, the biggest potential blight may be the casino itself if it closes. All of the economic development initiatives in what has been renamed the Revel Beach neighborhood are dependent on that fifty-seven-story building—the second largest in the state—not being empty.

As the casino gaming industry has matured and the market for gambling as entertainment has become saturated, the private institutions with vested interests in maintaining their economic status have pursued three strategies, sometimes with the assistance of public policy makers. In chapter 3, we focused on the first strategy, that is, efforts to maintain an oligopoly position through product differentiation by branding Atlantic City as a destination resort for a younger, hipper, and more well-to-do clientele. In chapters 4 and 5, we discussed cost-cutting measures as a means of restoring profitability and their impact on the working lives of the employees we interviewed. But there is a backlash against these cost-cutting strategies by organized labor, including efforts of union members to express their voices at work. This response was addressed in chapter 6.

The third managerial strategy, socializing (or externalizing) risk using public funds, was covered in this chapter. Profits are private, but when ventures fail, the taxpayers are expected to chip in. We addressed the relationship between public and private sectors, especially the ways in which private interests are supported by public initiatives. Governor Christie championed four interrelated measures in order to reshape the casino gaming market in New Jersey: (1) deregulation to enable the casinos to cut costs; (2) restructuring of the regulatory authorities that disempowered the relatively independent Casino Control Commission; (3) usurpation of democratically elected government in favor of bureaucratic administration under state control; and (4) tax breaks for a struggling new casino that ultimately could not deliver on its promises. Taken together, they represent the approach of big government conservatism—a far cry from the fairy tales of swashbuckling entrepreneurs operating in deregulated markets that conservatives like to tell. Instead, it brings us back to Galbraith’s definition of predation: using public sector resources for private gain.

Most of these moves are often justified by referring to the vision of Atlantic City as an upscale vacation destination, though some are clearly responsive to the industry’s calls for lower costs. Whether or not the architects of the 2011 legislation that engineered the takeover and the policy makers who supported development subsidies envisioned themselves as advancing the public interest in pursuing these initiatives is beyond our scope. Our focus is on impact. What is concerning for the future is that scant attention is being paid to what we consider the core issue in economic development: good jobs. The casino economy needs to be more than a place to party. It needs to provide sustainable livelihoods and meaningful work for the people of Atlantic City and surrounding communities, as well as other localities tied to casino gaming.


Barbara A. Lee and James Chelius, “Government Regulation of Labor Management Corruption: The Casino Industry Experience in New Jersey,” Industrial and Labor Relations Review 42, no. 4 (1989): 536-48; Robert Goodman, The Luck Business (New York: Free Press, 1995).


DGE staff increased from 270 to around 340 following the reorganization, according to an interview with the new director, David Rebuck. See Israel Posner, “Interview with David Rebuck,” LIGHT’S ON 2, no. 2 (2012): 1-3, accessed May 29, 2014,


Philip Mattera and Kasia Tarczynska, with Greg LeRoy, Megadeals: The Largest Economic Development Subsidy Packages Ever Awarded by State and Local Governments in the United States (Washington, DC: Good Jobs First, 2013).


Between February 1, 2010, and January 31, 2013, New Jersey development agencies have awarded $2.1 billion in tax credits and grants to 170 projects throughout the state; the average monthly subsidy increased by 400 percent during the Christie years. John Whiten, New Jersey’s Subsidy Surge Has Not Subsided (Trenton: New Jersey Policy Perspectives, 2013), accessed May 29, 2014,


The pier was originally converted to a mall in the 1980s, with small shops owned by local business owners. These business owners lost their shops during the conversion to the Pier.


Good Jobs First, “Beginner’s Guide,” accessed May 29, 2014,


Edward A. Morse and Ernest P. Goss, Governing Fortune: Casino Gambling in America (Ann Arbor: University of Michigan Press, 2007).


Casinos technically have the option of paying a 2.5 percent investment alternative tax instead. Now that online gaming has been introduced (see chapter 8), there is a higher rate of 2.5 percent in investments or a 5 percent investment alternative tax on online GGR.


Funds from the luxury tax support marketing the resort as a tourist destination and debt service on the Atlantic City Convention Center. The source of data for casino taxes and fees is “DGE Announces 4th Quarter and Year-End 2013 Results,” April 7, 2014, Press Release, accessed April 10, 2014,


Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (1944; repr., Boston: Beacon, 2001).


Rent-seeking behavior is defined as the effort to obtain economic benefits in the political arena. For a discussion of the propensity for rent seeking by casinos, see Alan Mallach, “Economic and Social Impact of Introducing Casino Gambling: A Review and Assessment of the Literature,” Discussion Paper (Philadelphia: Federal Reserve Bank of Philadelphia, March 2010), 16.


Dean Baker, Taking Economics Seriously (Cambridge, MA: MIT Press, 2010), 14. See also Pietra Rivoli, The Travels of a T-Shirt in the Global Economy, 2nd ed. (Hoboken, NJ: Wiley, 2009).


James K. Galbraith, The Predator State (New York: Free Press, 2007), xiii.


Goodman, Luck Business, 135-37.


Jesse McKinley and Charles V. Bagli, “Success of Cuomo’s Plan for More Casinos Relies on His Power of Persuasion,” New York Times, June 17, 2013.


Douglas M. Walker, Casinonomics (New York: Springer, 2013), 88.


Morse and Goss, Governing Fortune.


Suzette Parmley, “Casino Closure Means Tax-Revenue Drop for A.C.,” Philadelphia Inquirer, December 31, 2013; Suzette Parmley, “New A.C. Mayor Vows to Dig City Out of ‘Mess,’” Philadelphia Inquirer, January 14, 2014; Suzette Parmley, “Fiscal Pain from Atlantic City’s Decline is Countywide,” Philadelphia Inquirer, March 30, 2014.


Randall Chase, “$8M Bailout Proposed for Del. Casinos,” Press of Atlantic City, June 18, 2013.


Nick Casiello Jr., “The Adoption and Development of the Casino Control Act,” in Casino Gaming in Atlantic City: A Thirty Year Retrospective, 1978-2008, ed. Brian J. Tyrrell and Israel Posner (Margate, NJ: ComteQ, 2009), 82.


Posner, “Interview with David Rebuck.”


Michael Clark, “Gov. Christie’s Plan for A.C. Takeover: Christie’s Plan is a Partnership, Mayor Lorenzo Langford Says,” Press of Atlantic City, July 22, 2010.


Anthony Marino, “Crime in Atlantic City,” in Tyrrell and Posner, Casino Gaming in Atlantic City, 54-62.


Casino Reinvestment Development Authority, Tourism District Master Plan, February 1, 2012, accessed May 27, 2014,


Juliet Fletcher, “Blunt Talk and Atlantic City are Highlights of Chris Christie’s First Year as New Jersey Governor,” Press of Atlantic City, January 2, 2011.


Juliet Fletcher, “Gov. Christie, Senate President Sweeney Coming Closer to Agreement on Atlantic City,” Press of Atlantic City, August 22, 2010.


Interview with William Cheatham, quoted in Michael Clark, “Overhaul Leaves Atlantic City Feeling Weak,” Press of Atlantic City, February 6, 2011.


Other concessions included an amendment that insisted that the state commander overseeing public safety would have to coordinate with the mayor and city police officials. Michael Clark and Juliet Fletcher, “Atlantic City ‘Renaissance’ Awaits Christie’s Pen,” Press of Atlantic City, January 11, 2011.


Casino Reinvestment Development Authority, Tourism District Master Plan, 1-1.


The Benton Harbor story is described in Jonathan Mahler, “Now That the Factories are Closed, It’s Tee-time in Benton Harbor, Mich.,” New York Times Magazine, December 15, 2011, and Roger Bybee, “Democracy vs. Profit is Central Issue in Takeover of Benton Harbor, Mich.,” In These Times, April 26, 2011.


Pew Charitable Trusts, The State Role in Local Government Financial Distress, 2013, accessed June 10, 2014,


Donald Wittkowski, “Gov. Christie’s Plan for A.C. Takeover: Gaming Industry Welcomes Atlantic City Plan, but Others Skeptical that NJ Can Do Better,” Press of Atlantic City , July 22, 2010.


Jennifer Bogdan, “Clock Ticking for Results in State’s Five-Year Experiment,” Press of Atlantic City, January 26, 2014.


Casino Reinvestment Development Authority, 2012 Annual Report: The Five Year Master Plan, 1 of 5, accessed May 27, 2014,


CRDA, 2012 Annual Report, 13.


Donna Weaver and Wallace McKelvey, “Mission in Crisis,” Press of Atlantic City, September 23, 2012.


Braden Campbell, “Landowners Fight CRDA,” Press of Atlantic City, May 21, 2014.


Jennifer Bogdan, “Growth Ahead in A.C.,” Press of Atlantic City, March 19, 2014.


See “Revel Casino Timeline,” in Donald Wittkowski, “Revel in Atlantic City May Have Deal with Chinese Bank to Finish Casino,” Press of Atlantic City, March 31, 2010.


Michael Clark, “Casino Union Local 54 Sues Atlantic City to Force Referendum on $300 M. Revel Tax Break,” Press of Atlantic City, March 9, 2010.


Additional subsidies for road improvements, worker training, and other items were promised, leading to a total estimated subsidy of $323,000,000 according to some accounts. More information can be found in the Good Jobs First subsidy tracker database.


Emily Previti, “Revel’s Original Estimate of 5,500 Full-time Employees Will Now Be 38 Percent Part-Timers,” Press of Atlantic City, February 15, 2012.


Kelly Bennett, “Can Revel Save Atlantic City?” The Atlantic blog, accessed August 27, 2012,


“Casino Chat with Chuck Darrow and Suzette Parmley,” June 13, 2012,, accessed July 16, 2012,


Donald Wittkowski, “Revel Falling Short,” Press of Atlantic City, October 21, 2012.


Kitty Bean Yancey, “Could New Megaresort Revel Be Atlantic City’s Game-Changer?” USA Today, March 8, 2012.


Wittkowski, “Revel Falling Short.”


Amy Brittain, “3 Months After Opening, Atlantic City’s Revel Casino Still Has Some Kinks—Like an Unfinished Beach,” Star-Ledger, July 16, 2012.


John Appezzato, “N.J. Casino Commission Approves Restructuring Plan for Revel,” Star-Ledger, June 1, 2013, and Jean Mikle, “State Takes $300 Million Pension Gamble on Revel Casino Owner,” Courier-Post, August 12, 2014.


Randall Fine, quoted in Donald Wittkowski, “Revel Lifts Smoking Ban, Hopes Gamblers Light Up,” Press of Atlantic City, May 29, 2013.


Jennifer Bogdan, “Revel Goes All In with Slot-Loss Refunds for July,” Press of Atlantic City, June 21, 2013.


Quoted in Jennifer Bogdan, “Revel Switches Gear, Name to Market to Gamblers,” Press of Atlantic City, June 20, 2013.


W. F. Keogh and Vincent Jackson, “Revel Workers Vote to Unionize,” Press of Atlantic City, June 8, 2014.

Lena’s Story

We met Lena after work on a hot summer evening. We sat comfortably in three chairs in her newly decorated business. The shop had just closed and a few employees were packing up and saying goodbye. The display cases looked immaculate, and even after a long work day, Lena’s clothing looked fresh and she did not have one hair out of place. Her old friend, Gloria, was also there. They have known each other for years. Gloria helped watch Lena’s children when they were young; she seemed like more of an aunt than an older friend. “I was the nanny,” she exclaims. Several times during the interview, Gloria interjects with interesting prompts to encourage Lena not to forget certain experiences as she described her employment in the Atlantic City gaming houses.

Lena has worked hard in several jobs at five casinos—cashier, cocktail waitress, marketing assistant, casino host, and poker dealer. As with other workers we spoke with, working in the industry was a family affair. Her parents first settled in New York City after they emigrated from Colombia in the 1980s. Lena was ten years old then. She worked diligently on her English, trying to fit in, and she now speaks flawlessly in her second language. Soon her parents were drawn to Atlantic City, as casinos first began to attract workers from overseas and U.S. ethnic communities. Her mother was employed as a casino hotel housekeeper. Her father held down two low-skilled jobs to cobble together a living. In New York, she felt they had a normal family life, with weekends off to spend together. It was different once her parents worked in the casinos. “And just coming here … weekends were spent alone with your brothers and your sisters babysitting, cleaning, and doing chores.” In her mind, a “normal family structure” was “almost nonexistent” in Atlantic City because of the shift work: “I think that’s what I struggled with the most for twenty years working in the casinos.” Traveling to visit relatives in Colombia from time to time, she envied how extended families would help each other, how “everybody takes care of everybody’s kids.”

Like many other employees we met, Lena’s entrée into the casino workforce was by default. “[T]hat was my last option in life when I was younger … to end up in the casinos… . I ended up getting pregnant my senior year in high school, having a child, and I was forced to work in the casinos.” She started out as a cashier, “in the cage,” as it was called then, making change for the slot machines and issuing chips for gaming tables. That job did not last long. Lena recalls: “I was fired because I was short money. Or I had too much money. My accounts were never even. I was the worst cashier ever.” Watching the money was just not her thing. She was only twenty years old then. Hard to imagine that she would eventually watch over pots worth multiple thousands of dollars while dealing poker. Even harder to imagine that she would one day own her own business.

Lena is very warm and outgoing. She smiles easily. Called a “nice girl” by her coworkers and superiors, she sought something that would more fit her personality. She landed a job as a cocktail server at Trump Plaza. But she was very low in seniority, so she had to take the assignment and shift that was offered. It was a Chinese restaurant off the gaming floor. Lena called it an “executive pit stop” for one drink after work, and the executives “didn’t tip.” “I was making $4.00 an hour and I was just like ‘How am I going to support my child?’” She relished the rare, lucky Saturday nights when another server called out or went home early and she could be reassigned to a station with more business and better tips. Earning more money was a priority. Then an opportunity came along to serve cocktails at a local nightclub. The decision was a “no brainer,” she says, adding, “I went from making $7.00 a night to making $250.00 a night!”

Lena’s satisfaction with her nightclub job lasted about two years. She wanted to go to college. So she worked nights in the club. She rose early to see her children (she now had two, the second with her eventual husband) before they were passed into Gloria’s capable hands. In the warm weather, they would all go to the beach for the day and Lena would sit and do her homework, asking for as quiet an environment as possible. Unfortunately, she suffered a steep loss in income during the July 1990-March 1991 recession. Nightclubs in town had fewer customers and, as a result, were not making money. This forced Lena to look elsewhere for work.

As Atlantic City casino employment rose from 1991 to 1997, it was relatively easy to cycle in and out of the industry. Lena was able to secure a position in casino marketing at the Atlantic City Hilton—the property that once housed the famous Golden Nugget and eventually became the now-closed Atlantic Club. Marketing was a remarkably small, two- or three-person department at most casinos, thus a low-level worker handling reservations would also be included in meetings with a director or executive. As a woman, especially a Latina, Lena struggled to have her voice heard at marketing meetings. She had ideas, brilliant ones in retrospect, but they were overlooked. At one meeting, she urged the casino president to open up a beach bar, pressing “You know, you have this whole area right here in front of the beach. Why don’t you make a club there?” She continues: “And they all looked at me and laughed. I said, ‘I am telling you, if you put a club in one corner right on the beach, this place would be jam-packed on a daily basis. People want to come here to party.’ [Management replied], ‘People don’t come to Atlantic City to party. People come to Atlantic City to eat and gamble and that is what we focus on.’ And I said, ‘No, no, no, no, no, no! You are missing a whole crowd; you are missing a big piece.’” They treated her like a little girl, as if saying “hush up.” That was circa 1994. The Atlantic City Hilton beach bar opened in 2003, nine years later.

The marketing department was tough. Lena talks about playing the game. If you are not willing to play the game, you are not going to progress. And it was a boy’s game. “You have two choices as a female in the casino industry [in marketing]. The choices are either you have to turn yourself into a man and you got to think like a man and you got to be bold like the boys, or you have to sleep with the boys.” Lena had gumption, but she stressed to us that she was unwilling to do either one.

After two years just booking reservations, Hilton management did reward her with a slight promotion as a casino host. She loved working as a host because she dealt with the public. Hosts cater to customer needs, especially high rollers. They give out show tickets, dinner vouchers, and other comps. In her words, “Everything went through marketing.” She was stretched thin, running around at all hours of the day and night, picking up the phone constantly, taking requests from executives, plus making quick decisions. One big gambler wants a bottle of Hennessey XO in his room at 3:00 in the morning. No requests went unheeded and few were turned down. Lena felt she was earning $20,000 per year doing virtually the same job as executives earning $100,000 per year. And her hours got longer and more erratic. She witnessed “ridiculous favoritism” among managers toward employees. The demands and the work schedule became impossible when she had a new baby. In short, she was “taking care of everybody” except her own family. She needed a change.

She switched to the marketing department at the Trump Taj Mahal because she was promised a day schedule and more regular hours. She worked for a female manager who served as a mentor. While the mentor was capable and considerate, the entire upper management operation at the Taj appeared unorganized, scattered, “one big mess.” At the Taj, Lena confirmed to herself that marketing was a dead-end job for women. Two casinos. Two marketing positions. Unfulfilled promises and dreams. She gave up college for this?

Lena got very depressed about what to do next. She used to hang around the poker room with her then boyfriend (now ex-husband) while he played poker. The poker boom was just starting to take off. The game was viewed by a new generation of gamblers as more skilled than the usual table games where you play against the house and the house always has the edge. The manager of the poker room offered to pay for her casino license and train her. Lena was enticed with the offer and the paycheck potential of $150-$200 in cash per night. She dealt poker for over ten years, rotating among all shifts—grave, swing, and day—to try to best balance dealing poker with her family responsibilities as her children grew from infants to young adulthood.

Dealing poker requires skills. Cards have to be shuffled low to the table felt. The cards need swift, steady wrist action, also low to the table. You have to be intelligent, with strong math skills. Ironically, the young woman who was fired for being the worst cashier wound up counting and handling correctly hundreds of thousands of dollars in poker chips. Plus, you need people skills, moving the game along, handling the customers, and entertaining them. On a good night, Lena would deal twenty to twenty-five poker hands in just 30 minutes, averaging in tips $10 to $20 per hour. One night, however, she “pushed” a $135,000 pot, meaning she pushed the chips to the winning player. The player’s tip was a measly $3.00. This equaled .0022 percent, a tiny fraction less than 1 percent. The hand took about fifteen minutes to deal, and $3.00 is fairly insulting. Sometimes, Lena adds, it’s “demoralizing” because no one talks to you, you’re “just a machine there.” But poker helped her feed her family.

It was the smoking in the poker room that made her quit after she got pregnant with her last child. She let her husband support her while she stayed home with her children. She returned two years later to the poker room at the Borgata because she heard dealers were “making crazy money.” When Borgata opened in 2003, the game was surging in popularity, fueled by young players who learned the game online and wanted to experience the live version. The poker room kept growing in size to accommodate more tables, and yet the dealer staff remained essentially the same size, resulting in more tips, shared by roughly the same number of dealers. Lena would do seven or eight table deals—meaning management would shift her to different tables—without a break. Or work eight hours straight with one break. The special situation about dealing poker is this: When your shift is over, your shift is notover. Not in the middle of a hand. “You’re not done until they say you can go,” said Lena. There is no walking out. Overtime can be mandatory.

The tips hit $60 per hour, but the work was physically and mentally demanding. According to Lena:

Your brain’s gotta go; you have to be aware. The deck has to be accounted for every single hand. So as you’re counting pots, as you’re checking, you know, keeping track of the cards that are going out, you also got to keep track of your cards, where your cards are. If there is a card missing at any particular point and at the time we didn’t have … deck counters, machines that shuffle for us. Back then there was no shufflers. So we had to hand shuffle count the decks every three hands. We had to count the decks. It was, it was a demanding job. I mean the money was excellent, I’m not complaining. I just couldn’t deal with it.

The repetitive motion of dealing caused injuries to the wrist, the arm, the shoulder, and sometimes the back. She and her fellow dealers were prescribed pain medications, physical therapy treatments, and endured multiple surgeries. “Every day there is somebody on medical leave or injury. Head injury, elbow surgery. Every day there is prescription drug abuse to the max.” That’s what it takes to get through a shift, Lena confesses.

In high limit games, when players were losing money—on tilts as it is called in poker—some would throw cards at her. The crisp, sharp edges would cut her hands. One time a player smacked her in the back of the head, even though casinos frown upon the physical harassment of dealers. If you make a mistake in the deal, she says, they will eat you alive. Other customers would swear at her—names like bitch, slut, scum, dirty “spic” (a racial slur), and even cunt (a slur for females). The f-bomb was hurled at her regularly. It got to the point where the pressure of the job and the anger inside of her in anticipation of the next shift overcame Lena. She would get sick to her stomach nearly every day. It not only affected her. It affected her husband and her children. At first, she took half a Xanax to calm down in order to cook dinner and share a meal with her family before swing shift. Then she eventually learned and practiced self-hypnosis that she integrated into her shower and makeup and dressing routine. This bought her another few years on the job.

Even though Lena loved her regular clients, estimating that she knew about 80 percent of them on a personal level, ultimately, the work intensification and the injuries, along with the player abuse and the depression of seeing people lose money every night or every week, forced her to look for something else to do in life. Lena was stuck, without hope, and feeling at the end of the line, a “pressure time bomb” as she called it, both at work and at home. To survive, she needed to walk away. And so she did.

Except now her adult son is dealing poker to eke out a living. Just like his mother, the industry offered him a life preserver when it was needed. Lena clearly frets about his future, observing that “at the time he barely got his high school degree and he just didn’t know what to do with his life so I had to make the choice.” Dealing cards was better than dealing drugs. Only for him casino work is part-time, with no benefits. The once-booming business is now shrinking, and full-time jobs as rare as hen’s teeth. It remains to be seen if her two younger children, who are still in school, will also be drawn in.

She bemoans the limited options for young men in the local economy, viewing technical schools as “aimed for a female kind of situation,” meaning mostly focused on careers in female-dominated industries such as health care, cosmetology, and massage therapy. Even the casinos offered fewer options for her son than for her: “As far as from housekeeping to cleaning, most all you see is female staff. Cocktail waitressing. Food and beverage. Mostly an all-female staff unless you go into the high, high-end restaurants where the only thing you see is male management and the waiters themselves. Other than that, it’s all female. You walk into a club, it’s mostly female staff. Everywhere you go, it’s a big female market.” In response to our probing for more information, she indicates that even dealing is increasingly feminized, especially in poker. The reason is clear. “I just think it’s a big tipping industry and they’re more interested [in bringing in male gamblers]. So you gotta keep the place full of females.”

Lena is now an entrepreneur, a sole proprietor. She recently opened a small business in a health care field. She says she owes a lot of money to her investors who believe in her and the business plan she developed. She works hard every day, but loves being her own boss. “Having a business is like having a child,” Lena laughs. “It’s like taking care of a baby.” As we have seen, Lena is a dedicated mother.