Gambling in American History

See Lotteries. <

According to the Nova Scotia Gaming Control Act, casino gaming is under the auspices of the Nova Scotia Liquor and Gaming Authority and the Nova Scotia Gaming Corporation. The authority is in charge of the regulation and control of all legalized gaming in the province. The corporation, in turn, conducts and manages all legalized forms of gaming in the province. For casino gaming, the corporation entered into a contractual arrangement with Sheraton Casinos Nova Scotia to operate the two casinos as the sole appointed agent on behalf of the corporation for a period of twenty years.
Games of chance permitted to be played in Nova Scotia casinos are roulette, baccarat, minibaccarat, blackjack, slot machines, keno, video poker, video keno, video blackjack, pai gow, pai gow poker, big six, craps, and poker and its variations. For slot machines, the payout must not be less than 86%.
Nova Scotia casinos are open all days of the year with the exception of Good Friday, Easter Sunday, Remembrance Day (11 November), and Christmas Day. The casinos can operate on a twenty-four-hour basis, but only the Halifax Casino does so for seven days a week; as an economy measure, the Sydney casino operates twenty-four hours a day on Fridays and Saturdays and from noon to 4 a.m. on Sundays through Thursdays.
In accordance with the strict liquor regulations in Nova Scotia, the Gaming Control Act does not permit the provision of complimentary alcoholic beverages in casinos. From day one, Sheraton Casinos Nova Scotia made numerous attempts to have this rule changed. These efforts were successful to the extent that the operator will be able to provide free alcoholic beverages to high-end players in the designated area (Crown Club area) of the Halifax Casino Nova Scotia.  In addition, high-end players from outside of the province will be able to receive credit on demand in this casino.
The Halifax Casino Nova Scotia has a gaming floor space of 34,900 square feet with 40 table games and 688 slot machines. The Sydney Casino Nova Scotia has 20 table games and 350 slot machines on 15,400 square feet of gaming floor space.

Nova Scotia is one of the four Atlantic provinces of Canada. The province has an area of 21,425 square miles and a population of 935,000 (1998). The two casino cities – Halifax, the capital of the province, and Sydney – have populations of 350,000 and 85,000 in the respective metro areas.
In a province with high unemployment and a suffocating debt load, any new business investment that creates jobs is a welcome option. Casino gaming is such an option, and the government was wise to pick this option. Casino gaming not only creates jobs just as other business investments do, it creates many jobs and many secure jobs.  In fact, casino gaming is perhaps the most labor intensive of all entertainment industries. In addition to the direct employment effect there is the indirect employment effect through the casinos’ purchases of goods and services. Furthermore, there would be a direct and indirect employment effect during the construction period of the casinos. Altogether, this would create an employment effect of substantial proportions.
Next in line is the tourism imperative. Tourism is a very important industry for Nova Scotia, and the government and casino proponents eagerly emphasized the enhancement of tourism through casinos. A note of caution is in order, however. Nova Scotia is known for its beautiful nature and tranquility, and that will remain the premier cause for tourists to come and see such attractions as Peggy’s Cove and the Cabot Trail. It would appear very unlikely that “gaming tourists” can be attracted in the sense of tourists who did not have Nova Scotia on their map previously and excluding visitors from the other three Atlantic provinces. Nevertheless, there can be no doubt that casino gaming will represent an additional incentive for tourists. This well-to-do category of gaming patrons is a premier target group for casinos in general and for the two Nova Scotia casinos in particular. Take, for instance, cruise passengers. The number of cruise ships coming to Halifax has risen considerably in recent years, and this increase has been fueled mainly by the New Atlantic Frontier consortium of sixteen East Coast ports. Cruise passengers will come to the casino, and they come in droves since the Halifax casino is only a leisurely twenty-minute walk away from the cruise terminal at Pier 21.
Finally, there is the monopoly aspect for the operator, which is perhaps the most powerful incentive and a lifeline for sustained profit performance in a sparsely populated province. The twenty-year contract with the government provided SCNS/Casino Nova Scotia with the franchise to be the sole casino operator in Nova Scotia. In fact, the monopoly extends to all of Atlantic Canada, at least for the foreseeable future, since there are no active casino-initiatives in New Brunswick, Prince Edward Island, and Newfoundland. This means a monopoly in a territory the size of France, with a population of 2.4 million people. It should also be noted that the Halifax and Cape Breton gaming markets can be viewed as separate markets, since they do not intersect at the 0–100-mile range. Consequently, the likelihood of cannibalism is very low.
After the announcement that casino gaming would come to Nova Scotia, some bands of the Mikmaq Indians indicated plans to establish casinos on Native land. Consequently, the government started negotiations with the Indian bands in order to preserve the monopoly status of the two casinos. In February 1995, an agreement was reached with the Eskasoni Band Council in Cape Breton regarding gaming activity on the reserve and profit sharing from the proceeds of the Sydney Casino. Specifically, under the terms of the agreement, the band would regulate and monitor gaming activity on the reserve, which would include VLTs and charitable gaming but not a casino. Furthermore, 50% of the profits of the Sydney Casino would be earmarked to go to the entire Mikmaq Community in Nova Scotia. <

After the announcement that casino gaming would be coming to Nova Scotia, the government appointed a Casino Project Committee to (1) draft a request for proposals (RFP) for bidders and (2) select and recommend a proponent to the government for the license to operate the two casinos.  The RFP was designed in a record time of four weeks. Its most important aspects and requirements were as follows:

The two casinos would be publicly owned and operated.
A gaming commission would be established to regulate and monitor gaming.
A gaming corporation would be established to operate and manage the two casinos. The day-to-day operations of both casinos would be conducted by a private company on behalf of the gaming corporation; this agent would be determined through the bidding process.
The tax on gaming revenue (win tax) was set at 20 percent; in addition, 70% of the net income of the Halifax casino would go to public coffers; the remaining 30 percent would go to the private company. The Sydney casino would be a charitable casino operation, and the casino operator would receive a management fee plus a negotiated percentage of the net income.
Two interim casinos would have to be in operation within sixty days of acceptance of a proposal.
At the time of the announcement of the short list, the names of the six initial bidders were officially disclosed. They were ITT Sheraton Canada, Casinos Austria, Harrah’s, Aztar, Grand Casinos, and Crystal Casinos. With the exception of Harrah’s, all casino companies had entered into partnerships with local interests in order to enhance their chances. The first three bidders made the short list, and ITT Sheraton Canada eventually got the nod. Since the proposals of other bidders were not made public, one can only speculate about the reasons why it was ITT Sheraton Canada. Most likely, ITT’s guarantee of a payment of C$100 million for the first four years, which ended on 31 July 1999, may have tilted the balance in its favor. These payments ensured that total provincial revenue from gaming would not be less than C$25 million in each of the first four years. In return, ITT received the license to be the sole casino operator in Nova Scotia for twenty years, after which time the casino assets along with the customer database would become property of the province for a symbolic amount of one dollar.
In order to enhance its chances to become the operator of the two casinos, ITT Sheraton Canada had formed a partnership with a Halifax-based company, Purdy’s Wharf Development Ltd., on a 90 percent to 10 percent basis. This partnership would operate the casinos under the name Sheraton Casinos Nova Scotia (SCNS). SCNS became part of Park Place Entertainment Inc. (PPE) in 1999 when PPE acquired the gaming assets of Starwood Enterprises, which, in turn, had acquired ITT in 1997; subsequently, SCNS changed its name to Casino Nova Scotia.

The idea to introduce casino gaming in Nova Scotia in order to stimulate tourism first surfaced in the early 1970s when a study of the experience with gaming in the United States and Europe was commissioned. It took another twenty years before the issue of casino gaming emerged again. Other forms of commercial gaming have been big business in Nova Scotia for a long time. Lotteries, bingo, betting on horse tracks, and, more recently, video lottery terminals (VLTs) registered a total wager of approximately $500 million in 1993.
It is somewhat ironic that the momentum for casino gaming started at a time when public sentiment was divided, if not outright hostile, toward gaming. In fact, sparks literally flew in the wake of the government’s decision to remove VLTs from non-age-controlled premises such as convenience stores, laundromats, and bowling alleys in February 1993. Store owners were justifiably incensed about the unexpected loss of revenue, whereas the vocal opponents of VLTs argued that this step was necessary to keep minors away from gaming. The government was somewhat caught in the middle, and it responded with a review of the gaming laws. A subsequent report struck a cautious note with a recommendation not to expand gaming in Nova Scotia until the residents had a chance to express their views on this matter. In the meantime, the Nova Scotia Lotteries Commission conducted an independent study on gaming with specific reference to VLTs, casinos, and bingo. After carefully weighing the pros and cons of casino gaming and taking account of a survey that found that 59 percent of the respondents were not in favor of introducing casino gaming to Nova Scotia, the study group made an interesting recommendation. Two casino pilot projects should be granted – one in the Halifax-Dartmouth Metro Area and the other one in Cape Breton – for a one-year trial period in order to monitor and assess the impact of casino gaming and its acceptance by the residents.
The interest in operating casinos was enormous: The study group received no less than thirteen proposals to do so, and among them were fairly detailed project descriptions by Hilton and Grand Casinos. The Hilton proposal suggested building a casino in a Halifax landmark hotel, the 1928 Hotel Nova Scotian, which was being operated by Hilton Hotels after a complete renovation in 1988. This proposal was endorsed by the Halifax Board of Trade.
Grand Casinos suggested a large hotel–casino–resort complex in the Ragged Lake Industrial Park Area outside Halifax; no surprise here that this proposal was supported by the Halifax Industrial Commission. What was surprising was the entire fanfare and promotion of these two proposals, and particularly the one of Grand Casinos, since it must be remembered that the introduction of casinos was not even on the drawing board.
All of this and the report itself became history with a change in government. But the casino issue did not fade into oblivion. After only four months in office, the new government resurrected the thorny issue of gaming in Nova Scotia and empowered the House Committee on Community Services to conduct hearings all over the province on the issues of whether casino gaming should be introduced and whether VLTs should be brought back to convenience stores. In its report, the committee recommended (1) that casino gaming should not be introduced in Nova Scotia or, more specifically, that it should not yet be introduced because too little was known about the socioeconomic impact of gaming, and (2) that in view of the potential harmful effect on Nova Scotia’s reputation as a nature-oriented and peaceful tourist attraction, VLTs should be in age-controlled premises only.
To everyone’s surprise, the government did not follow the committee’s line of thinking. In a complete turnaround, it was announced that casino gaming would be introduced, and the sooner the better because of its beneficial impact for the province. This meant a fast tracking period for casino gaming. The reasons for this move lie in the dire situation of provincial coffers: Nova Scotia has one of the highest ratios of public debt per capita in Canada, and it suffers from persistent double-digit unemployment. Casino gaming as a very labor-intensive business was simply seen as an opportunity that could not and should not be missed.

The state of North Dakota has perhaps the widest-ranging charity gaming operations based upon casino games in the US.
Residents of the state had played many games of chance ever since statehood was achieved in 1889. Although the games were illegal, authorities were very tolerant of their existence, especially when the beneficiaries of the games were local charities. In the 1970s the operators of the games began to advertise openly, and it was clear that they were making no pretense about flouting the law.
The attorney general of the state decided to enforce the law. As he did so, he told complaining citizens that they should change the state constitution that banned all gambling. The citizens petitioned the legislature to propose an enabling amendment that would permit the legislature to govern gambling. Such an amendment became part of the state constitution with widespread citizen approval in 1976. Then a law was passed legalizing bingo, tip jars (jars filled with a fixed number of pull tabs), pull tabs, and raffles. In 1981 a law was enacted permitting charity blackjack games and poker games. Next the citizens who opposed gambling petitioned to have a vote repealing the law. They got the vote, but not the results they wanted. In 1982 a majority of 63% of the voters cast ballots in favor of blackjack.
The blackjack and poker games must be played in sites approved by local governments. The games must be conducted by nonprofit charity organizations certified by the attorney general of the state as qualifying under federal Internal Revenue Service code Section 501c criteria. Individual wagers are limited to five dollars per hand. The games are usually held in bars or restaurants, and those enterprises cannot participate in any way in running the games. They must rent their facilities to the charities at a fixed rate that does not depend upon the revenue of the gambling. The establishments may not give any food or beverages to the players, but the latter may purchase such items. The state imposes a tax ranging from 5 percent to 20% (depending upon the amount) on the charities’ gambling returns.
The charity gambling provides the most important supporting revenues for major cultural organizations such as public television, the Plains Art Museum in Fargo, and local humanity councils. The leading recipient of funds has been the North Dakota Association of the Disabled.
Until Alabama defeated the lottery in 1999, North Dakota was the only state in the twentieth century that experienced voter disapproval of a specific lottery proposal. The voters defeated lotteries three times. The leaders in the campaigns have been the charities running blackjack games.
The state does permit some pari-mutuel gaming; however, there are no major facilities in operation. There are four major Native American casinos offering machine and table games. They are at Spirit Lake, Fort Yates, New Town, and Belcourt. <

North Carolina permits limited stakes bingo games offering maximum prizes of ten dollars per game. Charities in the state achieve benefits of less than $10 million a year as a result of the games. According to my personal interview with tribal member Earl Dixon in Las Vegas on 13 February 2001, the Eastern Tribe of Cherokee Indians has utilized North Carolina’s charitable gambling statutes in order to negotiate a casino compact under the provisions of the Indian Gaming Regulatory Act of 1988. In conjunction with Harrah’s Gaming Company, the tribe operates a large casino with over a thousand video gambling machines. <

New York has been of great historical importance to gambling. New York being the first state to greet most of the immigrants to the country, New Yorkers saw those immigrants as customers for gambling products.  In turn the immigrants became employees and then the entrepreneurs of gambling. Figures such as Jack Morrisey and Richard Canfield developed casinos that became models for later operators. The first horse racetrack in the New World was on Long Island. Racing has continued to be a major gambling activity throughout the state’s history.
When gambling moved westward, it moved with New Yorkers. The Louisiana Lottery was run out of New York City. The early founders of the Las Vegas Strip were from New York; prominent latter-day casino developers in both Las Vegas and Atlantic City have New York roots. New York was the second state to create a lottery (1966), the first state to authorize offtrack betting (1971), and the first state to utilize a lotto (progressive jackpot) lottery game (1978).
New York remains an important state for gambling. Although campaigns for commercial casinos have failed repeatedly, the state has excelled in other gambling activity. New York leads the nation in both lottery revenues and revenues from pari-mutuel wagering. The state is the venue supporting several of the nation’s major race tracks - Belmont, Aqueduct, and Saratoga. The state receives more public revenue in terms of actual dollars from gambling than any other state. Historically, and in contemporary times, New York has also led the nation in illegal gambling activity.
Given this history, New York officials were very aware of the activity in Atlantic City after 26 May 1978 when the first legal casino gambling began on the boardwalk. Coincidentally, New York was suffering an economic downturn at the time. Not only did the Atlantic City experience look like one New York could duplicate, but the New Yorkers feared that competition from Atlantic City could have a drastic effect on hotel trade and other tourism in New York City. It was not long before there was a concerted effort to get casinos into the Empire State. There were two big barriers to the campaign for casinos. First, such gambling authorization would require an amendment to the state constitution. That would take a supermajority in two consecutive legislatures, followed by a vote of the people. Second, interests from around the state wanted casinos in their vicinities. Buffalo and Niagara Falls wanted casinos; the Catskills wanted the casinos; so did the Adirondack resort area; and so did several rival locations in the New York City area – the Rockaways, Coney Island, and Manhattan. Legislative representatives could not decide among the communities. Therefore, in 1980 they decided to pass eight different casino amendment bills. Before they could act in 1981, Atty. Gen. Robert Abrams wrote a devastating report on Atlantic City, calling it a failure from every possible angle – crime, social consequences, and economic development. The bills did not get out of committees in 1981. Since 1981 bills have been introduced, and there has been lots of talk about casinos and slot machines here and there. Even with the opening of a Niagara Falls, Ontario, casino, which gained over half of its revenues from New York residents, New York officials have not been able to build a consensus in favor of any casino proposal.
But this does not mean New York has no casinos. The existence of a wide variety of charity gambling, including Las Vegas Nights, meant that the state was required to negotiate with Native American tribes for gambling facilities. The Oneida tribe in the central part of the state actually opened a bingo hall in the early 1970s, before the Seminoles in Florida did so. The Seminoles had the resources to take the controversy over Native gambling through the courts, so they get credit for being the Native gambling pioneers. The Oneidas continued bingo through the 1980s until they negotiated for casino gaming. At first their Turning Stone Casino offered only table games, but now they have over 1,000 machines in the 120,000-square-foot facility. Two other tribes, the Senecas and Mohawks, had bingo games, but there was no other casino until the Mohawks entered into a compact with New York State for a facility in northern New York near the Canadian border.  In the early 1990s, the Mohawk site near Massena was the scene of deadly violence as pro- and antigambling factions among the tribe contested gambling decisions, and law enforcement officials from Quebec and New York intervened. They have maintained a sometimes shakey but nevertheless effective peace since then. Plans to open a casino are ongoing in 2001. <

New Mexico has many forms of gambling. Horse racing as well as charitable gambling operations have been in existence for many decades. In 1996 a state lottery began operations. Fourteen Native American tribes have been able to negotiate the right to offer casino gambling.
With the expanding gambling establishments, the horse tracks of New Mexico were heavily hit by competition during the 1990s. Over the years the tracks in the state sought relief from the state legislature. Finally, in 1997, the tracks were authorized to have slot machines. The state agreed to let tracks have 300 machines each as long as they could all be tied together in a slot information network. The tracks give 25% of the revenue directly to the state and give 20 percent to horsemen through race purses. The tracks keep 55%. Machines are permitted to run twelve hours a day, every day – as long as the track offers some racing products.
On 4 May 1999, Ruidoso Downs, less than a half an hour away from the large Native American casino of the Mescalero Apache tribe, was permitted to start operating its machines. The track also has simulcast racing each day of the year so the slot machines are available to players 365 days. Live thoroughbred and quarter horse racing occurs four days a week from Memorial Day to Labor Day. The nation’s leading quarter horse race – the All American Futurity – is run on Labor Day. The track is beginning to turn around several years of losses (it never stopped racing), but it would like to be able to stay open longer hours and also have more machines in order to compete more equitably with the Mescalero casino.
Nonprofit clubs are also permitted to have fifteen gambling machines each. <

After Nevada, New Jersey is the nation’s leading gambling jurisdiction. The state has one of the nation’s premier lottery organizations, it has an active horseracing business, and of course, it has the casinos of Atlantic City.
In 1969, New Jersey became only the third state to institute a government-run lottery. The state’s operations were different than those in New Hampshire and New York, the pioneer lottery states. Both of these jurisdictions had fallen short of their desired revenue goals because their games were slow and relatively expensive. New Jersey set its revenue targets, and lottery organizers went after the targets aggressively. They advertised the lottery to wide markets. They reduced the price of tickets to fifty cents each, and they held weekly drawings. Using a new style of ticket distribution, they witnessed unparalleled success. New Jersey became a model for other new lottery states – a model that suggested significant sums of money could be raised through the lottery. The state were widely imitated.
The major reason that New Jersey is a leader in gambling revenues is the fact that the state has authorized land-based casino gambling for Atlantic City. It now has twelve very large casinos, which generate gambling win revenues exceeding $4 billion a year.
The casinos of the city draw over 30 million visitors a year to the gambling halls, with over 1 million square feet of gambling space, 35,000 slot machines, and 1,450 tables for games. The hotels also have nearly 12,000 rooms.
For most of a century, New Jersey and urban political corruption seemed to go together like the proverbial horse and carriage, whether it was Jersey City’s Boss Frank “I am the law” Hague, or mobsters in control of activities in Newark, or the Republican political machine of Atlantic City. That machine meant Louis Kinley, “Nucky” Johnson, and “Hap” Farley. Scandal surrounded the southern New Jersey beach city that had been known as “the queen of American resorts”.
Atlantic City had developed as the premier summer resort after a railroad connected Philadelphia with the seaside in the 1850s. A permanent two-mile-long plank boardwalk along the ocean became a community symbol. Dozens of resort hotels, some being the most luxurious in the country, sprang up near the beach area. A pier was constructed, and carnival rides, pitchmen, and shows featuring palm readers, snake charmers, and freak displays appealed to the masses while other accommodations sought to reach out to the most affluent. By the beginning of the twentieth century, over 700,000 visitors a year were crowding into Atlantic City. The community also attracted the new gangsters who flourished during the Prohibition era, and these individuals had their hand in many illegal activities, including prostitution and gambling. But mainly Atlantic City was known for its entertainment. The Miss America show was created there in 1921, and in 1929 it moved into a new convention center.
The bosses kept illegal activities alive, but the community itself began to undergo a slow death during the Depression years and World War II. Postwar prosperity did not turn the town around, as its infrastructure – its many old hotels – no longer had the amenities that summer visitors demanded. Moreover, better transportation – faster trains and air service – could take vacationers to Florida just as easily as to Atlantic City.
The city fathers had to react, or the community would be totally lost. Kinley and Johnson ended their careers with criminal convictions; Farley looked for a better conclusion for his reign. He was instrumental in winning the Democratic National Convention for the resort in 1964. This exposure only showed the resort for what it was, a decaying relic from the past. Out of that public relations disaster emerged a concerted effort to bring casino gaming to Atlantic City. In 1970, Farley used his political power and his position as a state senator to seek state legislation to authorize a vote on casinos. He was unsuccessful and was soundly defeated for reelection as his political corruption was exposed. Others picked up the casino campaign, however. In 1972 a commission was authorized to study casino gambling. The notion that legalized gambling could help eliminate illegal gambling was voiced as well as concerns that casinos would bring in more organized crime. The report recommended that the voters of the state decide the question.
A 1974 referendum was placed upon the ballot by the legislature. It called for state-owned casinos in communities desiring them. Opposition led by religious groups used the notion that casinos would be in every city – “in your backyard” – of the state and also that the state would be at risk if it were the owner of the casinos.  The measure failed by a 60 percent to 40 percent margin.
City fathers were devastated, but in 1976 they reorganized for another battle, making sure the power structure of the state was fully organized on behalf of casinos. Legislative leaders sponsored the bill that put the casino proposition on the ballot. This time the casino proposals called for casinos only in Atlantic City, specified that taxes from casinos would go to aid seniors and the handicapped, and specified that casinos were to be committed to urban redevelopment projects for decaying Atlantic City. The bill also called for casinos that would be private rather than state sponsored. That last provision was important, as the casino advocates found a company that was operating casinos in the Bahamas—Resorts International Casino of Freeport – that stepped forward to finance most of the campaign. Resorts put more than $1 million into the campaign. The casino proponents included the governor, the legislature, seniors groups, and local leaders throughout the state; opposition was again confined to religious groups. This time the measure passed by a 56 percent to 44 percent margin. Resorts and the other proponents of casinos had spent $1.5 million on the campaign; the church groups opposed to casinos had spent $22,000
The state legislature passed enabling legislation for the regulation of casinos in 1977, and on 2 June of that year Gov. Brendan Byrne traveled to Atlantic City to sign the bill into law. Governor Byrne promised that the people of Atlantic City would be helped by the casinos and not hurt by them. The casinos were to be the most strictly regulated casinos in the world – a claim heard in every jurisdiction that opens gambling halls. The state of New Jersey was going to keep its vigilance at the highest levels to ensure that there would be no wrongdoing. Byrne ended his signing ceremony with these words, “I’ve said it before and I will repeat it again to organized crime. Keep your filthy hands off Atlantic City. Keep the hell out of our State”.
To accomplish the task he set before the state – to revitalize an economically depressed community with classy casinos run with integrity – the 1977 act created two bodies: the Casino Control Commission (CCC) and the Division of Gaming Enforcement (DGE). The CCC was an independent body of five full-time members appointed by the governor. It had its own staff.  The DGE was part of the state attorney general’s office. The DGE investigated license applicants, and also it took initial action against license holders if they violated regulations. Its actions were in the form of nonbinding recommendations to the CCC, however (Lehne 1986; Demaris 1986; Mahon 1980). The casinos were required to give the state 8 percent of their gambling gross profits to be used for the designated purposes and also additional funds (up to 2.5 percent of gross profits) to be used by a Casino Reinvestment Redevelopment Authority for projects in Atlantic City. Casinos had to be in facilities with 500 hotel rooms each. They would be allowed to have 50,000 square feet of gambling space with 500 rooms, and more space if they had more rooms. There were very strict limits placed over advertising activity. At first the casinos had to close each evening, but after a decade, they were allowed to remain open twenty-four hours every day. The notion of strict regulation was supported by the placement of state inspectors on the gambling floors at all times, as over 1,000 regulators were available to monitor the action of the casinos, which eventually numbered twelve.
From the onset, it may be suggested that the whole process was compromised. Only one company sought a license at the beginning, and the state was exceedingly interested in gaining revenues from gambling so that it could start fulfilling the many promises made. The first applicant was Resorts International, a company that had developed casinos in the Bahamas. In doing so, the company had developed many ties with questionable characters and had also been involved in giving many gratuities and favors to government officials. The DGE advised that a license not be granted. The CCC after much soul searching agreed to grant a temporary license. In the duration of the temporary license period, the casino realized net profits almost equal to its $75 million capital investment. At the end of the time, it was again investigated by the DGE. The DGE not only reasserted its past reservations about the activity of Resorts in the Bahamas but also pointed out many violations of New Jersey regulations by Resorts during the temporary license period. Again the DGE recommended that no license be given. As there were as yet no other casinos in operation, however, the CCC overruled the DGE and a permanent license was granted (Mahon 1980; Demaris 1986).
The first casino, Resorts International, had started its operations with the temporary license on Memorial Day weekend in 1978.  The success of the opening was dramatic, reflecting a strong pent-up demand for legalized gambling on the East Coast. Most players then, as today, came to Atlantic City by roads, with a good share on bus tours. They were not typical tourists in that they stayed only an average of four to six hours each and spent about fifty dollars each visit.
As the 1980s developed, many operators rushed into Atlantic City to set up shop. The Golden Nugget, Showboat, Harrah’s, and the Tropicana came in from Nevada, and Bally’s slot machine company set up its first casino shop in Atlantic City, as did Donald Trump. Some of the casinos experienced substantial success, but for others a reality of flat revenues and slow growth set in. In the early years of casino gambling, the crime rates in the community soared and charges of organized crime involvement were heard. Yet some researchers claim that the criminal activity was more related to the fact that so many visitors came to town than to the fact that they came to town to visit casinos.
By the time Donald Trump built the largest Atlantic City property, the Taj Mahal, in the late 1980s, the era of growth was put on hold. The casinos were supposed to be a catalyst to cause a rebuilding of the decayed resort city, but this had not happened. Properties near the casinos were boarded up, the city’s population declined (although the area population grew), and unemployment levels remained high. The casinos had done their job – they made revenues, and they certainly paid enough in tax revenues to rebuild several Atlantic City–sized cities. There was simply something missing from the political formula. It did not work. On the other hand, the casino owners remain optimistic that true success is right around the corner. <