The big gamble

ATLANTIC CITY, N.J.—On a recent Sunday afternoon in Atlantic City, hundreds of tourists hunched over rows of neon slot machines and packed poker tables on 161,000 square feet of gaming floor at the Borgata Hotel Casino & Spa.

Patrons sipped cocktails from short glasses delivered by roving waitresses and dropped money into machines with names like “Rich Girl,” “All That Glitters,” and “Mine, Mine, Mine.”

Less than 3 miles away, a different scene had unfolded an hour earlier. About 20 local residents gathered in a drafty room with exposed pipes in a run-down neighborhood for a morning worship service.

Churchgoers dropped cash into a small basket during an offering at New City Fellowship. They sipped from tiny cups of grape juice as Pastor Santo Garofalo reminded them of Christ’s death on the cross.

“Blessed be the Lord,” the Jersey Shore native read from Psalm 72 during the worship service on a cold February morning. “Let the whole earth be filled with His glory.”

For Atlantic City, glory is in short supply.

The city once famous for its boxes of saltwater taffy, horse diving shows, and miles of beach along a broad boardwalk now pushes garish casinos, sleazy strip clubs, and conspicuous sex shops with elaborate window displays.

A couple of blocks from the main strip along Pacific Avenue, crumbling row homes and Section 8 housing lie in the shadow of towering casinos.

Despite the casinos’ $2.5 billion in revenue and millions of visitors last year, some 30 percent of Atlantic City residents live below the poverty line. The town is $400 million in debt and could run out of cash by April. New Jersey legislators are considering a state takeover of the famed city.

The casinos aren’t immune.

Along Pacific Avenue, four of the former gambling giants sit shuttered and empty, like monuments to a bet lost on high stakes. Legalized gambling in New York and Pennsylvania hurt Atlantic City’s fortunes as patrons stayed closer to home, and the chronically mismanaged city never adjusted to competition.

David Cohen, a member of New City Fellowship, grew up in the area and went to high school in Atlantic City. He watched as the city overbuilt casinos and drove local merchants out of business.

These days, the city crumbles under the weight of a casino industry once pitched as its savior, and many local residents still languish as tourists whiz by blighted neighborhoods on the way to elaborate casinos, looking for a moment of fleeting glory.

“This place is a house of cards,” says Cohen. “And when the wind blew, it just fell over.”

EIGHT CASINOS STILL STAND in Atlantic City, including one with a famous namesake glowing in red block letters against the oceanfront skyline: TRUMP.

Republican presidential candidate Donald Trump once owned three Atlantic City casinos in the town’s gambling heyday. Only one remains open: the Trump Taj Mahal, an overblown homage to a cartoonish version of India with more than 3,000 slot machines and 1,200 hotel rooms in a 42-story tower.

A half-mile away, the former Trump Plaza Hotel and Casino sits empty along the main strip, closed to business in 2014. Until recently, the outline of Trump’s name was still visible after workers stripped the letters off the hotel’s glaring white tower.

Trump hasn’t controlled or managed the casinos he built since 2009, when his casino enterprises declared bankruptcy for a fourth time—a considerable record, even by Atlantic City standards.

But Trump’s name remains, reminding locals of the man who promised to make Atlantic City great, much like the candidate promises to “make America great again” if elected president.

Trump still owns a small part of the Taj Mahal, but casino operations belong to Carl Icahn, a billionaire friend who bought the casino’s debt after the company went into bankruptcy again in 2014. Icahn says he plans to revive the casino’s profits.

Today, burned-out letters greet visitors, and rows of slot machines remain empty on a Saturday night. In 2013, the casino tried a new venture to revive its prospects: a 35,000-square-foot strip club on the second floor. The casino still nearly closed last year.

Other casino operators have faced similar financial woes, and Trump’s company isn’t the only one to declare bankruptcy. But Trump is the only one running for president, and he does portray his time in Atlantic City as a success, despite the serial bankruptcies.

“I had the good sense to leave Atlantic City,” he said during a presidential debate last year. “I left Atlantic City before it totally cratered. And I made a lot of money in Atlantic City, and I’m very proud of it.”

Those left behind weren’t as proud.

Indeed, Trump’s company left local contractors, vendors, and low-level investors with pennies on the dollar when his enterprises declared bankruptcy. “He had stiffed hundreds of local businesses and left them with financial claims that they would never recover,” Steven Perskie, a former state lawmaker, told NJ Advance Media last fall. (Some Republicans also have criticized Trump’s use of eminent domain to obtain private property for his casino projects.)

Reuben Kramer, a reporter for The Press of Atlantic City, told a local radio station last year: “If you define success as building a sustainable long-term business that benefits you and others, I think he [Trump] failed abjectly.”

Kramer added: “If you define success as being scrappy and doing everything you can do to remain personally solvent and live to make money another day? Well, Donald Trump may have been very successful in Atlantic City from that viewpoint.”

THE GRAND OPENING of the Trump Taj Mahal in 1990 offered an uncanny foreshadowing of the business mogul’s presidential campaign some 25 years later.

On April 2, 1990, Trump bounded onto the city’s famous boardwalk to the song “Eye of the Tiger”—a tune he still favors for intros at rallies. Thousands of spectators swarmed, much as they do now.

After taking the stage, Trump rubbed a giant genie lamp, and a promise appeared on a massive screen: “Your dream is our command.” At campaign rallies now, Trump tells spectators the American dream is dead: “But we’re going to bring it back—big time.”

At its opening, the Taj Mahal was the largest casino complex in the world, and Trump spared little expense: gold doorknobs, marble countertops, $14 million worth of chandeliers, and bell hops wearing $1,500 turbans. It was ornate and glitzy.

It was also unsustainable.

A year after the grand opening, Trump’s casino declared bankruptcy. The mogul had financed the construction with $675 million in junk bonds, and the casino’s profits couldn’t make up for the lavish spending and high-risk debt. Even a $65 million bailout package for Trump from several banks in 1990 didn’t prevent the bankruptcy.

Similar scenarios unfolded three more times for Trump’s casino interests over the following decades, and while the casinos stayed open for years, financial trouble never faded.

A similar story played out at other casinos in Atlantic City, and the city itself fared even worse. Though the casinos still take in more than $2 billion each year, little of it benefits the city’s residents.

It wasn’t supposed to work this way. Indeed, New Jersey state lawmakers pitched the idea of legalized gambling in 1976 as a way to fight social and economic problems plaguing the city. Legislators framed the idea as a “tool of urban renewal.”

A group of pastors warned against the excesses and potential addictions of gambling; but the referendum passed, and the local paper ran the headline “CITY REBORN.”

Tourists did pour into Atlantic City, but crime also increased. Within a few years, local merchants were closing down, and a brutal reality was clear: Visitors came to Atlantic City to gamble and leave. The average tourist stayed six hours. Many never ventured outside the gaming resorts.

Casinos, including the Trump Taj Mahal, designed layouts to keep people inside: no windows, no clocks, and nowhere to sit except at slot machines or game tables. Footbridges over Atlantic Avenue meant a visitor never had to step onto an Atlantic City street.

“The idea is to lock people inside and take their money,” says Bryant Simon, author of Boardwalk of Dreams: Atlantic City and the Fate of Urban America. “That’s a bad business model if you’re hoping for money to flow back into a town.”

Many local restaurants couldn’t compete with casino buffets offering free meal vouchers to gamblers. Though conventions came to town, other entertainment businesses struggled. The last movie theater in the city closed in 1983, until an IMAX theater opened in 2004—at the Tropicana Casino.

Meanwhile, casinos did create jobs, but many employees commuted from nearby towns, taking their money to the suburbs. Casino owners took their profits to outside ventures too.

Earl Grinols, a professor at Baylor University and a gambling researcher, says casino owners like Trump operate like a “tollhouse” instead of reinvesting in the community. “He collected money from Atlantic City and took it elsewhere,” says Grinols. “When casinos operate that way, it sucks life out of the community.”

A New Jersey law does require casinos to reinvest 1.25 percent of their revenues into community projects through the state-created Casino Reinvestment Development Authority. But authority officials often have poured the funds back into casino development, with projects like roads and a tunnel to ferry tourists quickly past poverty-stricken neighborhoods and into casino parking decks.

Such projects help keep casino jobs and tourism alive, but they deaden the rest of the city and downplay other attractions in town, like the beaches and boardwalk that made it famous. (Neighboring towns do fine promoting beach tourism minus the casinos.)

Instead, huge billboards on Atlantic City streets advertise gambling addiction hotlines, while others feature scantily clad women at strip clubs with names like “Delilah’s Den” and “Bare Exposure.”

THAT MAKES LIFE TOUGH for Nikki Hanley, a single mom who attends New City Fellowship. Hanley, 29, lives in a housing project with her three small children and is excited about starting a new job cleaning vacant apartments in town.

After a Sunday morning worship service, Hanley says she wishes the city and casinos considered families more: “It’s like they forget we have kids.” For now, the mom who encourages her kids to read everything teaches them to look away when they drive through certain parts of town.

Here at the church, the children read Sunday school material, and Hanley follows along as Pastor Garofalo reads a passage from the book of Matthew about preparing for Christ’s return.

Hanley met church members last summer when they held a Bible club for kids in her neighborhood. She had looked for other churches to visit, but never quite connected: “This church found me.”

Garofalo hopes to find more local residents like Haley. The church holds outreach programs in neighborhoods in the summer, and it has created a separate nonprofit agency called Hope for Atlantic City to mentor youth and help local residents with simple home repairs. When Hurricane Sandy hit the Jersey Shore, the church became a hub for volunteers helping with disaster response.

Dave Cohen, the church member who went to high school here, heads Hope for Atlantic City. On a Saturday afternoon drive through town, Cohen and Garofalo pointed out some of the parts of town they target for outreach. Some areas struggle with crime compounded by a casino culture that fosters markets for prostitution and drugs.

“Back Maryland,” a notoriously dangerous neighborhood, sits directly across the highway from the gleaming tower of the Borgata Hotel Casino. “They’ll never touch it, they’ll never reach it,” Cohen says of the locals walking through a housing project parking lot. “It just looms over them.”

That makes true redevelopment a long-term haul focused on building relationships in the context of the local church. Cohen plans to launch a project in the fall to match kids at risk for dropping out of high school with local Christian mentors willing to give them summer jobs if they complete the program.

Garofalo is thankful the church has a place in a city that needs better news than a glitzy new casino. During Sunday morning worship in the drafty room without chandeliers or gold knobs, the pastor prayed with his small congregation: “Thank you for calling us out of our darkness and into the kingdom of light.”

For now, at least one person is unlikely to show up in Atlantic City: Donald Trump. “Atlantic City is a disaster,” he said at another debate last year. “And I did great in Atlantic City. I knew when to get out. My timing was great.”

Raising the stakes

When it comes to presidential politics, Donald Trump isn’t the only player with gambling credentials.

Las Vegas casino mogul Sheldon Adelson spent some $100 million on the GOP race in 2012, and many are watching to see whether the 82-year-old billionaire puts his chips on a Republican candidate during the primary season.

Politico reported Sen. Marco Rubio, R-Fla., and Sen. Ted Cruz, R-Texas, were among GOP candidates who have met with Adelson. So have Ohio Gov. John Kasich and former Florida Gov. Jeb Bush. But by mid-February, the owner of the posh Venetian casino hadn’t backed a contender.

Rubio has sponsored a bill to ban online gambling, a move Adelson would approve: Less gambling online means more gambling in casinos. But Rubio also opposed other forms of gambling expansion as a Florida state representative and once called gambling money “fool’s gold.” It’s unclear whether any of Adelson’s gold will go to a GOP candidate before the general election.

The Jewish businessman counts support for Israel as a top concern and remains decidedly liberal on social issues. In a 2012 interview with Commentary magazine, Adelson said Republicans should take a softer line on social issues and added: “If somebody wants to have an abortion, let them have an abortion.”