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Atlantic City Just Got a Little More Depressing

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Coffee stains on a maroon felt rug, a single broken bulb in a chain of flickering slot machine lights, the evocative odor of a billion deceased cigarettes.

A hangover, usually. A packaged croissant bought from a vending machine. A whiff of the ocean.

Typically, these are the sights and smells that linger with you as you wait in the open air bus depot on your way back home from what I’ll affectionately refer to as the most depressing city on Earth: Atlantic City.

It’s difficult to think what, if anything, could make this dilapidated palace any more dismal. But this story in the Baltimore Sun sure makes a strong case.

“A new statistical study shows the amount of time gamblers spent inside casinos in the nation's second-largest gambling market is down more than 22 percent, and the amount of money they spend there is down almost 30 percent over the last four years.

And the hit to the casinos' bottom line is substantial: gross operating profit per hour is down 61 percent.”

Indeed. The only thing more depressing than an Atlantic City casino is an empty Atlantic City casino.

“We didn't realize it at the time, but 2006 and 2007 in Atlantic City and Las Vegas was really too good to be true," Michael Pollock, managing director of Spectrum Gaming Group, tells the AP. "People were spending more than they could afford."

But in 2008, Atlantic City was hit by a perfect storm—a recession that kept gamblers at home, and a string of new slot parlors in Philadelphia that lured business away. And revenues aren’t expected to bounce back anytime soon, with a report by PricewaterhouseCoopers saying that casino revenues will remain 36 percent lower in 2014 than they were in 2006.

New Jersey lawmakers, understandably nervous, are taking action. Yesterday, state lawmakers advanced a number of bills focused on reviving the gaming industry.

Bloomberg reports that one new bill would establish a new tourism district around Atlantic City’s casinos “with tighter state control over planning, development and law enforcement within the district.” Another bill would change the “regulatory structure in Atlantic City for the first time in 30 years.” Both bills are aimed at making Atlantic City more attractive to investors.

Whether or not these efforts will succeed in turning around this sinking ship remains to be seen. But for those of us who are somehow haunted by a nostalgic affection for the place, there’s some small comfort to be found in the word’s of a little songwriter by the name of Bruce Springsteen when he sings, “everything dies baby, that’s a fact. But maybe everything that dies some day comes back.”

And for all its miserable, miserable charm, here’s hoping it does.
POSITION:  No positions in stocks mentioned.