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Can Atlantic City be saved as a destination spot for gamblers?

Only 35 years old, the Atlantic City hotel-casino district now resembles the aging Lola in Barry Manilow’s depressing tune “Copacabana” – dressed awkwardly and sitting blankly in the back of a disco, lamenting her lost youth, downing drinks and wondering how it all went bad.

Squeezed between the Atlantic Ocean and neighborhoods that even law enforcement officials admit are unsafe, the massive hotel/casinos bleed red ink daily. The toxic combination of a sagging economy and increased competition have caused massive layoffs and panicked New Jersey politicians to the point that they are now close to taking control away from local officials in what may be a last-ditch effort to inject the area with a game-saving shot of adrenaline.

Last week the New Jersey state legislature approved a proposal by Governor Chris Christie to create a so-called Tourism Zone in the hotel-casino area. The vote, which still requires the crossing of a few T’s and the dotting of a few I’s, basically takes control of the area away from city and gives it to a state board, loosens regulations on the 11 city casinos doing business, and creates a board which will oversee the project.

While some city officials – especially Mayor Lorenzo Langford – are furious about losing control, most agree that something has to be done before AC becomes completely irrelevant as a gambling-entertainment destination.

The numbers are stark and frightening – in 2009 the city’s casinos reported a 24-percent drop in revenue ($3.9 billion, down from $5.2 billion the year before). The totals for 2010 are not complete yet, but everyone predicts a similar decline based on monthly reports.

While there are signs the economy is slowly starting to gain traction, not everyone agrees that the hotel-casinos will be able to regain their profitability of even a few years ago. Two big C’s – crime and competition – have taken what may be a death grip on the area.

Pessimists are quick to point out that the city’s signature event – the Miss America Pageant – ended an 85-year run in the city when it pulled up stakes in 2006, two full years before the economic meltdown, and wound up in Las Vegas.

With enough money still coming in, the city responded to the pageant departure with a shrug, but that all changed when the Great Recession hit two years later.

A second, more-subtle economic tsunami hit the city when neighboring states responded to the recession by increasing gambling options. Pennsylvania added slot parlors and table games, Delaware now has a modest form or sports betting, and West Virginia offers slots and table games. AC, whose street names provided the inspiration for the board game Monopoly, ironically no longer has a monopoly on gambling, and is hurting because of it.

With nearby options now available to gamblers, what incentive is there now to travel to Atlantic City?

That’s the same question asked by Elliot Schreiber of Philadelphia, founder and president of Brands and Reputation Management, a firm which helps companies and communities build their reputations through marketing strategies. Schreiber recently visited Atlantic City, and he openly wonders if it is possible for the state to restore the city’s image as a destination resort.

“Atlantic City has three assets,” Schreiber noted in a recently phone conversation. “The ocean, the gambling and the entertainment. Well, the entire state has shoreline, and frankly much of it nicer than what you’ll find in Atlantic City. You can gamble wherever you want now, so there is little incentive to drive there. That leaves entertainment, and that’s also available elsewhere. I guess if you package them together and it’s attractive enough, you could do some business. But there are also other issues at play.”

Among those other issues, says Schreiber, are safety concerns and changing demographics.

“When I was a kid I can remember my parents getting dressed up and heading for Atlantic City to see a show and go out to eat,” he said. “That was what you did – stayed in a hotel, saw a show. Today, unfortunately, Atlantic City has lost that demographic. The people who go there are older, and you wonder a generation from now where the customers will come from.

“Las Vegas, on the other hand, attracts a much younger crowd, and they’ll be likely to return. The 30-somethings might come to Atlantic City because it’s a cheap place to have a bachelor party, but that’s about it.”

Then there is the crime problem. AC has all the issues that other cities its size have – drugs and violence among them. But unlike Las Vegas, where crime can be rampant in certain pockets but is extremely rare on the Strip, AC’s crime is front and center.

Walk out the front door of any of the casinos in the city proper (three are located in the marina area) and you might have a front-row seat to a drug deal, assault or worse. Hardly what the suits who run the casinos have in mind when they pitch Atlantic City a tourist destination for the entire family. Layoffs in the city’s police department haven’t helped, and one of the aspects of the new Tourism Zone would replace local cops with an independent group.

State officials are candid about the work that needs to be done to again make Atlantic City acceptable to the gambling community and to families as a vacation destination, but Schreiber hints that the state may be tilting at windmills as it tries to staunch the bleeding.

“They (the state) need to do three things,” he says. “They need to restore the attributes the city had when it was successful. Right now it’s not family friendly. They have to somehow create competitive differentiation, and that’s not easy because of the intense competition. And they need solid infrastructure. That will cost money.”

To the credit of both the casino industry and the state, moves are being made. The Casino Association of New Jersey has a new president, Robert Griffin, who is on board with the state’s revitalization efforts. Griffin did not respond to a request for comment on this story, but after taking the job, said last month, “It’s time to move forward with . . . initiatives to make Atlantic City cleaner and safer.”

The Tourism Zone legislation, which has just a few minor hurdles to pass, also would help the state’s sagging horse race industry, plus allow the construction of smaller-sized hotel-casinos. Up to now only larger casinos have been allowed.

“The future of Atlantic City and the future of casino gambling in New Jersey are forever intertwined, and the bills which were approved by the Senate . . . are a strong first step to ensuring economic stability and vibrancy moving forward," said Sen. Jim Whelan after the legislation move forward last week.

Whether Atlantic City is charting a course for the renewal of the country’s second-largest gambling community or merely drawing dead is a question that will be answered in the next several years. But it’s beginning to look like the old line about the way to make a small fortune in a casino is to start with a large fortune is starting to apply to the owners as well as the gamblers.