ATLANTIC CITY — Visitation, casino employment, gaming revenue and state taxes and fees increased in 2018, all of which is real evidence that after several down years, the seaside resort is rebounding.
But there are also variables at play that lend credence to the thought that Atlantic City’s historic year may not translate to long-term success, according to experts.
In 2018, Atlantic City saw a 4 percent uptick in vehicle traffic, a 3.6 percent increase in employment, an 8 percent increase in annual gaming revenue and more than $243 million in taxes and fees collected by the state.
“I would look at these numbers from 2018 as a positive for us as a destination,” said Rummy Pandit, executive director of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University. “Overall, the trends look positive to me.”
The addition of two casino properties — Hard Rock Hotel & Casino Atlantic City and Ocean Resort Casino — in June had a major impact on all of those numbers, according to experts. But the city’s economic growth extended beyond casinos, Pandit said.
“There’s non-gaming growth taking place, which then leads to other economic growth in the (region),” he said, citing development in areas such as Tennessee Avenue and the Boardwalk. “Every day, there’s something new that’s added, and that something new is, in turn, generating revenue and employment for (Atlantic City).”
However, the absence of rail service for a quarter of the year, seasonal and temporary jobs at the new casino properties, the continued growth of online gambling and additional taxes due to sports betting could each artificially distort some of the positive numbers for Atlantic City in 2018.
For example, total traffic on the Atlantic City Expressway increased in 2018 compared to the previous year, from 18.5 million to 19.24 million, according to the South Jersey Transportation Authority.
Anthony Marino, a local analyst and former deputy executive director of New Jersey Expressway Authority, said that while visitation was “clearly up” based on the data, the total picture is incomplete because it does not include vehicle traffic numbers from either the Black Horse or White Horse pikes.
And the number of vehicles tracked at the Pleasantville toll plaza increased substantially after NJ Transit shut down the Atlantic City Rail Line in September, Marino said.
“We know that part of that (increase) was caused by the closing of the railroad,” he said. “I think that’s a reflection of workers and tourists that used to use the railroad, now were using the Atlantic City Expressway.”
Prior to the rail line’s closure, the SJTA had been keeping track of ridership. Since 2011, the number of passengers on the line had decreased every year, including a 9.2 percent decline between 2016 and 2017, and dipped below 1 million annual riders before its closure.
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New Jersey imposed an 8.5 percent tax on sports wagers placed inside an Atlantic City casino and a 13 percent tax on online or mobile betting. An additional 1.25 percent tax was signed into law by Gov. Phil Murphy, with those proceeds going directly to the Casino Reinvestment Development Authority for marketing.
Meanwhile, online casino gaming is taxed at 15 percent.
“Two entities are clearly benefiting — the state, through its new taxation on new revenues, and the casinos,” said Marino. “The third entity, Atlantic City, I think the jury is still out whether these visitor numbers can be sustained.”
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But even online gaming and sports betting are not increasing employment in Atlantic City in proportion to the revenue being generated. According to a 2017 annual report from the Casino Control Commission, online gaming only accounted for 176 jobs, or 0.08 percent of all casino employees.
Sports betting offers more employment opportunities, such as cashiers or food and beverage servers, Marino said.
“Most jobs in sports wagering are at the corporate or international headquarters of the (casino) partners. None of those jobs have to be based in Atlantic City,” he said. “All of these new revenues that are coming in may lead to false conclusions that they are creating new jobs in Atlantic City. To the extent they are, they are mostly at lower levels.”