Postcards from the Past, Lessons for the Future

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Postcards from the Past, Lessons for the Future
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1964 Democratic National Convention

• Should have been an economic boost to the
  fortunes of an aging resort already straining to
  compete.
• Instead, it marked the end of what had once been
  a grand era
• And it marked the beginning of a brutal downward
  spiral

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The Making of the President 1964

• The Original Bay of Pigs
• Theodore H. White

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The Indianapolis Star

• Early arrivals are dubious, inspecting rooms
  without TV or air conditioning and puzzling dark
  stains on the dingy wallpaper.

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Washington Star

• As a convention town, this is strictly
  Endsville. Now I know this is a resort left over
  from the early 1900s, but they could clean the
  rooms

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Cincinnati Enquirer

• paying for poverty at peak prices. Our room
  looked like something out of a Charles Addams
  cartoon book.

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Atlantic City in 1976

• Third highest percentage of public housing in the
  nation.
• About 40 percent of its housing was more than 60
  years old.
• Unemployment rate 20 percent, 40 percent in the
  winter.

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Atlantic City in 1976

• Population 42,000, down by more than a third
  from its peak.
• Senior citizens comprised 30 percent of the
  population.
• Entire tax base 317 million.
• Collecting less than 80 percent of its property
  taxes.

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Why did 1976 campaign work?

• Casinos were limited to Atlantic City.
• Tax benefits were designated to help seniors and
  disabled residents.
• Effective, well-organized campaign.

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Between Oct. 20 and Nov. 1, 1976

• 1,239 TV commercials
• Cost 240,915
• 4,329 radio spots
• Cost 91,869
• 82,642 in newspaper ads
• 19,455 in billboards

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Between Oct. 20 and Nov. 1, 1976

• 14 different TV commercials
• Airing on every commercial station in
  Philadelphia and New York
• 23 different radio spots
• Airing on 70 different stations

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What happened?

• All sorts of projections were made.
• All sorts of projections were wrong.
• We can glean some universal truths.

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Universal truths in gaming

• Doesnt evolve same way twice
• Requires significant public-sector commitment.
• Works best with existing tourism infrastructure.
• Fosters unrealistic expectations.
• Regional issue.

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What works?

• Effective regulation
• Effective public planning
• Free-market forces
• Realistic expectations

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Effective regulation

• Instills, maintains confidence of institutional
  investors, gaming public.
• Requires sharp, unwavering focus on integrity.
• Works best when implemented in comprehensive,
  detailed fashion.
• Allows for deregulation as industry evolves.

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Public sectors role

• Invest necessary funds.
• Foster positive investment climate.
• Build infrastructure
• Tourism
• Transportation
• Housing

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Let casinos be casinos

• Dont pretend they are something else.
• Restrictions in areas such as
• Credit play
• Alcoholic beverages
• Losses
• Have the impact of
• Stunting profitability
• Deterring investment
• Weakening casinos competitive posture

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Casinos compete

• Not merely amongst themselves.
• Casinos compete against any business that targets
  discretionary income
• Movies
• Professional sports teams
• Theaters, museums
• Restaurants, taverns

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How not to respond

• Do not impose artificial restrictions, such as
• Requiring live music
• Mandating minimum restaurant seating or meeting
  space.
• Prohibiting restaurants or meeting space

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Why not?

• Potential mismatch of supply and demand.
• Add unnecessary costs to project, which lowers
  the future ROI, dampens investment climate.
• Possibly prevents casinos from using their most
  potent marketing tools.

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Keep expectations realistic

• Anticipate and prepare
• Traffic will increase
• Both winners and losers will be created.

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• Having a great time in Atlantic City.
• Wish you were here!
• Mike Pollock

• Corporate Council on Africa
• Atlantic City, NJ