When casino gaming came to New Jersey in 1976, it included a prohibition against campaign contributions, political activity and office-holding by any casino executive or even employee. This applied to state offices and political activity in Atlantic County and Atlantic City.
Casinos could hire lobbyists to influence issues being considered by the state legislature or city council, but they couldn’t directly contribute money to any official, so their influence was slight.
The reason for this was clear, and Governor Brendan Byrne said it most succinctly when he kicked off the opening of Resorts International in 1978. He told organized crime to “keep your filthy hands off Atlantic City.” And I’m paraphrasing here.
That kind of reaction was understandable at that time. Nevada was by then slowly extricating its casino industry from the grasp of the mob. Remember, Tony Spilotro and Lefty Rosenthal were still active at that time, as documented by the excellent book Casino by Nicholas Pileggi (the movie is more fiction than fact).
So, Byrne was rightly concerned about mob involvement. But New Jersey regulations were tough, and proved to be effective in stopping “undesirables” from participating in the industry.
Fast-forward almost 40 years, and the success of Atlantic City inspired gaming’s expansion across the country, even into markets the Boardwalk town previously owned exclusively, sending the city’s casinos into an economic freefall.
While most of those states expanded gaming because the potential tax revenues were too lucrative to ignore, the integrity that New Jersey proved could be maintained by strict regulations was often copied, including the political bans.
Atlantic City did little to protect its investment or its territory, however, and I contend that prohibition on political involvement played a not-insignificant role in that inactivity. Many times in those early years, that ban on political involvement was a blessing, not a curse. The money was rolling in, times were good, and casino executives weren’t all that worried about what Trenton would do—and it actually saved them time and money.
But when the tide turned and even more onerous regulations were proposed, they had nowhere to turn. They weren’t part of the political network. They couldn’t make campaign contributions, so politicians didn’t have any incentive to get to know them beyond the “grip-and-grin” photos at the grand openings.
So, when things turned sour in the face of regional competition, raising real threats against New Jersey and its gaming tax revenues, there was no network to turn to. Politicians did silly things like proposing smaller “boutique” casinos, as if a tiny casino would work better than the bigger ones.
Casino executives had no forum to sit down with influence-makers to make a case for public/private cooperation. Governor Chris Christie unleashed his minions on Atlantic City who knew nothing about gaming, and finally, in a last desperate attempt to recoup the lost gaming tax revenues, there’s a hazy proposal on the November ballot to expand gaming into North Jersey.
The city of Atlantic City, meanwhile, spirals down the bankruptcy black hole with seemingly no way out, a state takeover looming. Blocked from utilizing the skills, background and wisdom of its most experienced businessmen—casino executives—Atlantic City’s elected officials are stymied.
Let’s imagine, for a moment, that casinos and their executives had been part of the political process. They would have been able to educate elected officials about their businesses and suggest ways the pubic sector could help, backed up, of course, by the promise of campaign contributions in election years.
This is the real world, after all.
Or imagine if a casino executive who lived in Atlantic City could become a member of city council or even mayor, bringing his budget expertise with him or her, and point out that the existing spending and budget process was unsustainable.
Unfortunately, outside of proving that gaming could be effectively regulated, New Jersey and Atlantic City have been the bad example for gaming around the country. Let’s hope other jurisdictions have learned the lessons so painfully taught by Atlantic City and involve their casinos and executives in the political process, so everyone can work together to find answers to both their challenges and opportunities.