What Happened to Atlantic City?

Atlantic City's trajectory is a classic American story of boom, bust, and ongoing attempts at reinvention. Founded in 1854 as a health resort, it flourished through the early 20th century, becoming a popular destination known for its boardwalk, hotels, and entertainment. However, post-World War II, the rise of the automobile and affordable air travel to other destinations led to a significant decline, leaving the city plagued by poverty and urban decay by the 1960s.

In a bid to revitalize its economy, New Jersey voters legalized casino gambling in Atlantic City in 1976, with the first casino opening two years later. This ushered in a new era of prosperity, transforming the city into the 'Las Vegas of the East Coast' and leading to a substantial increase in its tax base and visitor numbers by the late 1980s. However, this casino-centric model proved vulnerable. The opening of new casinos in neighboring states like Pennsylvania and New York, coupled with the 2008 economic recession and the subsequent rise of online gambling, severely impacted Atlantic City's gaming revenue and led to several casino closures in the mid-2010s.

By 2026, Atlantic City continues its efforts to diversify its economy beyond traditional casino gaming. The city is focusing on attracting non-gaming tourism through new attractions like the Island Waterpark at Showboat (opened July 2023) and the reopened Atlantic City Aquarium (March 2025). Infrastructure improvements are also a key focus, with major road paving projects, boardwalk repairs, and synchronized traffic signals underway or completed in early 2026. Residential development is seeing a resurgence, with luxury homes being built in areas like the Inlet neighborhood and a proposed $2.7 billion mixed-use transformation at Bader Field.

The casino industry in 2026 presents a mixed picture. While Atlantic City casinos collectively saw a 3.9% increase in revenue through April 2026 compared to the previous year, and a significant 7.1% year-over-year increase in July 2026, total gaming revenue (including online and racetracks) for New Jersey was up 11.9% in July 2026. However, brick-and-mortar casino employment fell to 21,172 in April 2026, the lowest in at least nine years, and the unemployment rate averaged 8.6% in the first six months of 2026, double the national rate. The Atlantic County Economic Alliance warned in August 2026 that over 8,000 jobs are at risk due to declining casino profits and competition from new New York casinos.

Despite these challenges, there is a sense of optimism, with Mayor Marty Small Sr. reporting in January 2026 that the city achieved investor-grade status from Moody's Ratings for the first time in a decade and crime rates have decreased. The city is also actively promoting itself as a destination for conventions and events, with Visit Atlantic City reporting a successful 2025 with $362 million in economic impact from meetings and conventions. However, the city faced a significant environmental challenge in late September 2026, when a nor'easter caused widespread flooding and the worst beach erosion since Hurricane Sandy, particularly north of Steel Pier.