2020 has been shaped by the COVID-19 pandemic. All aspects of our lives were affected, how we go to work, school, or socialize. Its economical effects were seen on a large scale since many businesses dropped down significantly, while some even collapsed.
Although this impact is expected to continue into the new year, 2021 promises to bring recovery for New Jersey and Atlantic City.
Locals know all too well how severely the local economy — driven largely by the hospitality, restaurant, entertainment, and casino industries — has been impacted by the pandemic. But the state Legislature recently passed new legislation, and this was the first step in Atlantic City’s economic recovery and growth from the pandemic.
The New Jersey Economic Recovery Act
On January 7, 2021, Governor Phil Murphy signed into law the New Jersey Economic Recovery Act of 2020. This was a long-awaited package of incentive programs intended to encourage job growth, community partnerships as well as property development and redevelopment. A consensus exists that this was the most significant action taken by the state’s government to boost growth and recovery since Governor Murphy took office.
“We are proud to announce that we have reached an agreement on a comprehensive economic recovery package that will support small businesses, drive sustainable economic growth, and reform our tax incentives system. This plan will specifically target historically underserved communities that have also been disproportionately impacted by COVID-19 with tailored programs to combat food deserts, spur brownfields redevelopment, and support historic preservation and renewal, as well as a grant and loan program designed to bolster Main Street small businesses,” said the statement by Governor Murphy, Senate President Sweeney, and Assembly Speaker Coughlin.
The Act is a complex piece of legislation, nearly 250 pages long, that creates or modifies more than a dozen different incentive programs. Some of the new programs created by it are: New Jersey Aspire Program Act, Emerge Program Act, Historic Property Reinvestment Act, New Jersey Community-Anchored Development Act, Food Desert Relief Act, and many more.
Two new programs that will directly and positively impact Atlantic City the most, are the New Jersey Aspire Program and the Emerge Program Act.
The first one will award tax credits to qualifying developers to build residential, commercial, and mixed-use projects. This will help advance redevelopment projects facing financing gaps as wells as those that would not be economically feasible without assistance. The second program will help companies looking to expand or relocate to New Jersey. This will be a significant boost for the economy of Atlantic County, where one in three people was out of work last June due to COVID-19.
Hospitality and Atlantic City Casino Industry
The casino industry and tourism played a big role in the Atlantic City economy and used to attract up to 30 million tourists per year. Atlantic City’s hotels and casino resorts, like all similar venues, have been badly impacted by the coronavirus situation and the government-imposed restrictions.
The city's nine casinos reported $260.86 million in total gaming revenue for November 2020, compared with $288.6 million in November 2019. The industry has reported $2.37 billion in total gaming revenue through the first 11 months of 2020, down 21.5% from the same period in 2019. This decline will have a significant impact on Atlantic City’s 2021 budget.
But, as they were being closed by the order of the governor for nearly four months in 2020, online gaming and sports betting were allowed to continue.
State-wide legalization of sports betting and online casinos helped the economy in a significant way so far. This was especially true when, due to lock-downs, many people turned to online casinos, both in and out-of-state. Even as some casinos adapted to restrictions by cutting their capacity down to 50/25%, many players still chose online versions. On gambling websites like VegasSlotsOnline we can read that even before the pandemic, players saw online casinos as a more convenient option compared to brick-and-mortar casino venues and as places where you don’t need to wait for your turn to play, or be surrounded by a big crowd. Together with the pandemic, this has led to the downfall of casino resorts.
In fact, online gaming in NJ has grown every month of 2020, including an 87% increase in November over last year’s $49 million. Online gaming has generated more than $870 million in revenue, which is a 101% increase compared to 2019! Incentive programs could bring hope for land-based casinos recovery, as well as new opportunities in the online realm.
Hopes for 2021
There are still many tough days ahead, but the programs that will breathe new life into our economy and get people back to work are already in place. In addition to that, the online economy will continue to gain new ground, as we saw in the example of online casinos, and will be an even bigger part of future growth offering new job opportunities.
At the end of this long road of significant setbacks and recovery is a better future, and we will get there together!