Atlantic City’s casinos were financially impacted, like industries across the US, when the economic bubble burst 14 years ago. That led to New Jersey taking additional steps to manage its gambling hub and oversee its operations and, as the years progressed following that recession, Atlantic City seemed to be on the road to recovery. Then, COVID-19 came in and erased all of the hard work and effort that had been put into the city’s rebound. According to a new study by the William J. Hughes Center for Public Policy (CPP), the pandemic not only erased the work since the recession, but also set Atlantic City back further. The good news is that recovery is underway.
Atlantic City Still Suffering Economic Fallout
Previous analysis of Atlantic City’s gambling market has revealed that it lost around 80% of its 2019 profit last year. The new study adds that the city’s brick-and-mortar casino win was 44% lower last year, following a 13% dip from 2018 to 2019. Given that much of Atlantic City’s operations focus on casinos and hospitality, the shutdown caused by COVID-19 resulted in unemployment reaching 16%, the third-highest in the US. Overall, according to the study, leisure and hospitality unemployment grew by 35% last year.
During the economic troubles 14 years ago, which many have called the Great Recession, unemployment in Atlantic City only dipped by 5.8% and unemployment in the leisure and hospitality sector overall lost 7%. This led the CPP to assert, “[The] 2020 [COVID-19] recession’s impact on Atlantic City’s total employment was nearly three times as large as the Great Recession’s…” The study adds that the impact from COVID-19 was six times larger on Ocean City, New Jersey than was the recession.
Optimism For a Swift Recovery
Despite COVID-19 being worse than the Great Recession, the CPP believes, as industry analysts have asserted, that Atlantic City could rebound quickly. This is supported by reports coming this year that profits at area casinos are on the rise and change in how casinos calculate their taxes could be on its way. Oliver Cooke, an associate professor of economics at Stockton University and an editor of the CPP report, states, “Should the national recovery continue to gather steam over the remainder of 2021, it would be especially welcome news for the southern New Jersey regional economy.”
However, even as casino operators update their properties in Atlantic City, a question lingers. As Cooke points out, and as many in the gaming industry have to be wondering, perhaps another transition in the US gambling space is coming. New Jersey was one of the first states to embrace sports gambling and online casinos, and it has to be glad that it did. The online gaming market helped the state avoid significant losses during the pandemic and casino operators are quickly warming up to the idea that iGaming could be the future of gambling. Cooke highlights that it’s possible that casinos could “redirect resources to higher profit margin revenue streams which require far fewer brick and mortar workers,” which is a hint that they might focus more on the online gaming segment moving forward.