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Why Atlantic City is failing and Vegas isn’t

Revel Atlantic City. 2 years old.  Cost $2.7 billion. Closing this weekend.

Revel Atlantic City. 2 years old. Cost $2.4 billion. Closing this weekend.

Atlantic City casinos opened 36 years ago with great hoopla about being an East Coast Vegas. Today, one casino there has already closed and three more will close imminently, leaving Atlantic City economically devastated. Revel is the poster child for the decline and fall. Constructed just two years ago for $2.4 billion, the 57-floor hotel casino has been in bankruptcy twice and will close permanently this weekend. Predictably there are brave plans to repurpose casiona as apartments or condos. But for that to happen, people will want to vacation and live there. Given that crime in the city is very high and tourist atractions like the boardwalk are in dicey areas, this seems unlikely.

From comments on Philly.com.

Vegas is different than AC. People come from all over the world to go to Vegas. AC is circling the drain. Are there parts of Vegas that are ghetto? Sure. In Vegas it’s the exception, in AC it’s the rule.

100% accurate. Forget the surrounding areas for a moment and simply look at the beach and boardwalk. It’s a ghetto. And I don’t mean any particular race. I mean a slum ghetto that families do not want to be around. Including mine.

Tourists in Vegas generally take a short taxi ride from the airport to The Strip or downtown, then stay there. Casinos offer a wide range of attractions other than gambling. Are parts of North Las Vegas dicey? Sure. However vacationers never go there. Instead, mega-scale casinos offer whatever you want, including world-class entertainment. Plus Vegas is a major city for conventions.

As such, gambling has traditionally represented about 80 percent of the 40,000-person [Atlantic City] economy. As Atlantic City is now learning, no city should put all of its eggs in one economic basket. The beleaguered residents of Detroit, once known as Motown for its automobile industry, can attest to the same thing. (It should be noted that while Las Vegas is hardly thriving, it has done a better job of building up non-gambling related industries than Atlantic City. Sin City is now a major destination for conventions and musical performances, for example.)

Also, the Downtown Project in Vegas is successfully helping revitalize the downtown casino area and bring in tech startups. Spearheaded by Zappos CEO Tony Hsieh, it is investing $350 million into the area.

Downtown Project mission:

Our goal and purpose is to help make downtown Vegas a place of Inspiration, Entrepreneurial Energy, Creativity, Innovation, Upward Mobility, and Discovery, through the 3 C’s of Collisions, Co-learning, and Connectedness in a long-term, sustainable way.

We’ve allocated $350 million to aid in the revitalization of Downtown Las Vegas. We’re investing $200 million in real estate, $50 million in small businesses, $50 million in education, and $50 million in tech startups through the VegasTech Fund.

A key to the continued success of Vegas is, I think, it never stops reinventing itself.

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