For two decades the separation between Miss America and casinos was so strong that pageant rules barred contestants from pulling a slot machine lever or rolling a pair of dice for fear the pageant's wholesome image might be tarnished.
The policy contributed to what was frequently described as a rocky relationship between the pageant and casinos, which provided free hotel rooms but arguably saw little economic benefit.
A new study, however, projects gambling as leading direct spending in Atlantic City as a result of the pageant. Nearly half the more than $32 million projected economic impact from the September pageant is expected to come from gambling - outpacing spending on food and beverage, shopping, and entertainment combined, according to a draft study completed by NW Financial Group for the Casino Reinvestment Development Authority.
Released last week to The Press of Atlantic City, the economic impact analysis was used to justify a $7.5 million contribution to the pageant over three years by the Casino Reinvestment Development Authority and the Atlantic City Convention & Visitors Authority, which merged in accordance with state legislation. The annual contributions of as much as $2.5 million will more than triple the subsidy the pageant saw in 2005, when it was last held in the resort.
"The important thing for us to keep in mind is that we believe we can create a serious economy of scale in hosting this event," CRDA Executive Director John Palmieri said at the meeting, calling the authority's contribution small in comparison to the expected return on investment.
The study estimates the Sept. 15 pageant and its associated parade will attract 129,200 visitors. That figure accounts for contestants and their families, volunteers, production staff, state pageant organizations, parade spectators and attendees of the pageant itself. Each person is expected to spend $114 on gambling for a combined nearly $15 million impact, according to the study.
The analysis is based on a 2008 Visitor Profile prepared by Spectrum Gaming Group for the Atlantic City Convention & Visitors Authority; it is often used by analysts. The profile attempts to predict spending patterns based on different types of visitors ranging from concert-goers to convention attendees.
Richard Perniciaro, director of The Center for Regional & Business Research at Atlantic Cape Community College, has conducted similar studies on the impact of special events in Atlantic City. Most recently he completed an analysis of the 2012 Atlantic City Airshow, regarded as one of the resort's biggest visitor attractions.
Projecting $15 million in gambling impact from the pageant sounds high, Perniciaro said.
"That's a large number. A lot of people who come in for special events don't tend to be gamblers," he said.
By Perniciaro's calculations, just more than $6 million of the $42 million the city saw as a result of the airshow came from gambling. That's about 15 percent of the total economic impact.
The economic impact of an event also should take into account how many people would already be in the area on the day of the event to accurately measure the added benefit, Perniciaro said. His calculations on the airshow account for the impact of 289,095 people in the city for the show, because he estimates 569,874 people who saw the airshow would have been in the city anyway.
Detailed explanation of the methodology behind the Miss America study could not be answered, officials said. NW Financial Principal Douglas Bacher said the firm was told to direct any questions on the study to the CRDA. Authority officials said questions couldn't be answered because the study is still in draft form. It's not clear which spending patterns from the 2008 Visitors Profile were used in the Miss America analysis.
The analysis completed by NW Financial is only the second attempt ever made to quantify the pageant's impact on Atlantic City. The first was completed by the Atlantic County Division of Economic Development in 1991, at the pageant's request. The study estimated a $30 million economic impact on Atlantic City in 1991 - or the buying power of $51 million by 2013 standards.
The study was produced just as the Miss America Organization, which had traditionally paid all of its production costs, began to lobby the Atlantic City Convention & Visitors Authority for a subsidy to keep the pageant in Atlantic City. The result was a $500,000 contribution that increased over time.
Unlike the latest report produced for the CRDA, the 1991 study did not attempt to predict spending of those drawn to the resort for the pageant's activities. Instead, it tried to quantify the financial impact of the free publicity the resort saw as a result of the pageant - a $2 million value from newspaper stories about the pageant, including many that never mentioned Atlantic City, $7.5 million in publicity derived from Miss America appearances, and $1.2 million from the broadcast.
Israel Posner, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, said regardless of the new study's projected gambling impact, it's clear that the event will benefit the city in terms of exposure and branding.
"The measure of the success of the Miss America Pageant is not confined to how much is spent by those particular visitors," he said. "The measure comes in terms of what those visitors say to their friends and family when they return home. What do they tell people about Atlantic City?"
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Comparing the numbers
Atlantic City Airshow
Estimated attendance in 2012: 908,000
Estimated net non-local attendance in 2012: 289,095
Total direct economic impact in 2012: Approximately $42 million, or about $147 per person
Food and beverage: $10.3 million, $36 per person
Lodging: $2.8 million, $10 per person
Entertainment: $12.7 million, $44 per person
Gambling: $6.2 million, $22 per person
Shopping: $8.3 million, $29 per person
Transportation $2.2 million. $7 per person
Source: Economic impact analysis by The Center for Regional and Business Research at Atlantic Cape Community College
Miss America Pageant and Parade
Projected attendance for the pageant and parade: 129,200
Total direct economic impact: Approximately $32 million, or about $249 per person
Gambling: $14.8 million, $114 per person
Food and beverage: $4.7 million, $36 per person
Shopping: $3.8 million, $29 per person
Entertainment: $5.8 million, $45 per person
Lodging: $1.3 million, $10 per person
Travel: $2 million, $15 per person
Source: Draft economic impact study by NW Financial