Memorial Day weekend will be a time of celebration in Atlantic City. May 26 will mark the 45th year since the first casino opened in Atlantic City, Resorts International. Resorts, besides being the first to open in Atlantic City, was the first legal casino to open outside of Nevada. For lawmakers and casino operators, Atlantic City was an experiment. Casinos in New Jersey were limited to Atlantic City and due to fears of corruption and mob influence were very tightly regulated.
Resorts International was step one in that experiment and it was well received. People flocked to Atlantic City, eager for a chance to roll the dice, bet on the turn of card, or pull the handle of a one-armed bandit. The casino quickly reached capacity. Hundreds of people stood in line waiting their turn to be admitted. Overnight, the United States had a second place for gamblers to go; it was not long before Atlantic City was challenging Las Vegas as the gambling capital of the country.
Other states were watching, but they were cautious, waiting to see if the Atlantic City experiment worked. It took 10 years before other states legalized casinos. The early adapters took a doubly cautious approach. They made the regulatory structure as strict as possible and banished casinos to out-of-the-way and difficult-access places, such as remote mountain towns and riverboats with limited hours and access. Those experiments encouraged yet others and more states added casino gaming to their menu of approved businesses.
The trend continued to pick up steam until it had covered nearly the entire country. Forty-five years later, it has not stopped yet. New York City is now taking bids for casinos within its borders. Casinos are also on the agenda in Texas. There are nearly 1,000 casinos in the United States, including commercial and tribal casinos and racinos. Last year, commercial casinos, video lottery terminals, igaming, and sports betting generated more than $60 billion in gross gaming revenue. Tribes produced another $40 billion.
The growth over a 45-year period has been astounding. In 1978, the Atlantic City casinos generated $134 million and Nevada casinos $1.8 billion for a total of just over $2 billion.
No one in 1978 could have predicted the size of the gaming industry by 2023. Most gaming operators were focused on the near future. In Reno, new casinos were the order of the day. The MGM Grand opened on May 3 and the Comstock Hotel and Casino Memorial Day weekend. By July, another three new casinos had joined the Comstock and MGM, giving Reno a total of five new casinos in 1978. None of those operators could see the future or they would not have wasted their time, energy, and money on Reno. Those new casinos in Reno represented the end of an era, the era of Nevada’s exclusivity.
Each time the rest of the country welcomed casinos, Reno welcomed fewer visitors. The same thing happened in Atlantic City, but the process took much longer. Atlantic City grew with barely a pause from 1978 until 2006. In 2007, neighboring Pennsylvania opened its first casinos. The casinos in Pennsylvania eventually took over 50 percent of Atlantic City’s gaming revenue. Now Atlantic City is facing a second shoe dropping. Three new casinos in New York City will have a huge impact on Atlantic City.
The CEO of Resorts, Mark Giannantonio, is also the president of the Casino Association of New Jersey. At a recent panel, Giannantonio predicted that the New York City casinos would cost 30-40 percent of Atlantic City’s revenue and lead to several casinos closing. If Giannantonio is right, the weakest casinos could be forced out of business. Resorts might be one — if not for igaming and sports. Resorts Digital produces nearly five times as much GGR as the brick-and-mortar Resorts and will save the casino, at least in the short-term.
Igaming and sports are an important part of the growth of gaming in 2023. Casino growth has peaked in many states, making the igaming and sports-betting trends even more important. The new era that began on May 26, 1978, is getting a second wind. In 2022, gross gaming revenue from sports was $9 billion, with $4.9 billion from igaming. That is about one fourth of the total GGR for the year.
The Comstock, Sahara, and more than 20 other casinos in Reno are long gone. But for every casino that did not make it, a dozen others located closer to the gamblers have taken their place. And just when the spread of brick-and-mortar casinos reached its natural limits, igaming and sports stepped in to take up the baton.
Memorial Day weekend will be a time of celebration for Resorts and in Atlantic City. For the gaming industry it is much more: The day represents a switching of gears and the beginning of a truly national industry.
