Atlantic City's Boardwalk Empire: From Resort to Gambling Mecca

Atlantic City has been several different things over the past 150 years. It started as a resort, then became a Prohibition-era gambling city, then declined, then legalized casinos, then had a second decline, then was partially rebuilt. Here is the timeline, compressed into items that each cover one phase.

1. Incorporation and the first railroad, 1854

Atlantic City was incorporated in 1854, built on a sandy barrier island called Absecon Island. The Camden and Atlantic Railroad arrived the same year. The business model from day one was urban Philadelphians who needed a place to go on weekends. The city was built to be a destination and nothing else.

The first boardwalk, an eight-foot-wide plank pathway, was completed in 1870 to keep sand out of hotel lobbies. This was a solution to a specific complaint from hotel owners. The boardwalk later became a symbol. Most symbols start as practical solutions to hotel-cleaning problems.

2. The Victorian resort era, 1870-1910

By the end of the 19th century, Atlantic City was the largest resort town in America. Hotels lined the boardwalk. The Steel Pier opened in 1898. The rolling chairs arrived in 1884. The population was around 27,000 full-time residents but summer visitors could push the city to 300,000 on a weekend.

The economy was tourism. The clientele was mostly middle-class Philadelphians and New Yorkers who came for a few days at a hotel. The entertainment was beach, boardwalk, shows, and an increasing amount of mildly illegal gambling. The gambling was tolerated because the city ran on it.

3. Prohibition, 1920-1933

The Volstead Act made alcohol illegal. Atlantic City, through the unofficial leadership of political boss Enoch "Nucky" Johnson, largely ignored the law. The city continued to serve liquor openly. Clubs flourished. Gambling rooms operated with minimal interference. Johnson's protection system, which involved bribes flowing up through the police and the party, kept things running.

This period is the one that later became the HBO show "Boardwalk Empire." Nucky Johnson was a real person. Most of the specific events in the show are invented, but the overall picture, which is that Atlantic City was America's de facto open city during Prohibition, is accurate. The city made an enormous amount of money. The Atlantic City Conference of 1929, where mob leaders including Al Capone, Meyer Lansky, and Lucky Luciano met to coordinate territories, happened there.

4. The decline, 1945-1976

After World War II, Atlantic City went into a long decline. The middle-class tourist market moved to jet travel, the suburbs, and Florida. The boardwalk hotels, which had been grand, were also old. Maintenance was expensive. The city's population fell, poverty rose, and large sections of the beachfront became derelict.

The 1964 Democratic National Convention was held in Atlantic City and the national press coverage was embarrassing. The city looked shabby on television. That embarrassment is sometimes credited with beginning the conversation about what to do with Atlantic City, which eventually led to casinos.

5. Casino legalization, 1976

In 1976, New Jersey voters approved a constitutional amendment to allow casino gambling, but only in Atlantic City. The vote was 56 percent yes. The amendment was sold as an economic development tool for a declining city. Whether it delivered on that is a separate question.

Resorts International opened in 1978 as the first legal casino east of Nevada. The lines outside on opening day stretched for hours. The Atlantic City gaming market grew rapidly through the 1980s, with dozens of casinos opening. By 1990, Atlantic City was the second-largest gambling market in the United States.

6. The Trump era, 1984-2004

Donald Trump opened three Atlantic City casinos: Trump Plaza (1984), Trump Castle (1985), and Trump Taj Mahal (1990). The Taj Mahal was the most expensive casino built in the United States at the time, costing approximately $1.1 billion.

The Trump properties had a complicated financial history. Trump Taj Mahal filed for bankruptcy in 1991, less than a year after opening, due to the debt service on the $675 million in junk bonds used to build it. Trump Plaza filed in 1992. Trump Castle filed in 1992. Each bankruptcy restructured the debt. Trump personally came out ahead in each, which is one of the notable features of American bankruptcy law.

The Trump casinos continued operating for decades after the initial bankruptcies, under various ownership structures. Trump himself divested from the casino business by the mid 2000s.

7. Competition, 2006-2016

Pennsylvania legalized commercial casinos in 2004, with the first opening in 2006. New York followed. Maryland followed. By 2012, casino gaming was legal in many of Atlantic City's former feeder markets. The economic case for traveling to Atlantic City evaporated for many regional gamblers. Revenue fell sharply.

Atlantic City gaming revenue peaked at approximately $5.2 billion in 2006. By 2016, it was approximately $2.6 billion, roughly half. Four casinos closed between 2014 and 2016, including the Revel (which had opened in 2012 as a $2.4 billion property, and closed two years later) and the Trump Taj Mahal.

8. Recovery and online gaming, 2017-present

Atlantic City's recovery, to the extent it has had one, has come from online gaming. New Jersey legalized online casino games in 2013. By 2020 and especially during the pandemic, online gaming became a major revenue source. Online revenue surpassed $1.8 billion in 2023, which is meaningful but has its own issues: most of the online revenue does not require the physical city.

The physical casinos still operate. Several closed casinos reopened under new ownership (the former Revel as Ocean Casino, the former Taj Mahal as the Hard Rock). The casino count stabilized at around nine properties. The boardwalk, however, is not what it was in 1995, let alone 1925.

9. What Atlantic City is now

Atlantic City in 2024 is a smaller, less prosperous, more regionally dependent casino market than it was at its peak. The boardwalk still runs. The rolling chairs still operate. Several casinos still have live entertainment and reasonably busy gaming floors, particularly on weekends.

The full-time population, around 38,000, is slightly more than it was in 1950. The summer crowds still come, though in fewer numbers than the 1980s. The city's finances have been under New Jersey state oversight since 2016, because the tax base collapsed when casino values fell.

10. The shape of the story

Atlantic City's history is a useful example of what happens when a city's economy is built on a single industry. The resort era worked until leisure patterns shifted. Prohibition worked until it ended. Casino gaming worked until competition arrived. Each reinvention has been partial and each has been followed by another decline when the conditions changed.

The current online gaming chapter is likely to follow the same pattern. It is working now. It may not work in 20 years, because online gaming is geographically fungible in a way that land-based gaming is not. The city will have to find the next thing. It will probably find it. It has been finding the next thing since 1854.

Atlantic City is a city that has reinvented itself four times and is probably going to need to reinvent itself again, because the sand keeps moving and the customers keep going somewhere else.

That is the summary. The boardwalk is still there. So is the ocean. Everything else has been replaced at least once.