The next Detroit? Atlantic City and Las Vegas facing catastrophic collapse
Posted: Dec 21, 2013 5:04 PM ESTUpdated: Dec 23, 2013 12:54 AM EST
AP file photo/Mel Evans
The next Detroit? Atlantic City and Las Vegas facing catastrophic collapseMore>>
- A federal bankruptcy court judge is getting ready to decide whether the Atlantic Club Casino Hotel in Atlantic City can be shut down next month.
- A federal bankruptcy court judge has approved the sale and shutdown of Atlantic City's Atlantic Club Casino Hotel. Judge Gloria Burns approved a deal Monday that was reached last week in which two rival companies, Tropicana and Caesars, will buy the casino for $23.4 million and shut it down Jan. 13.
But according to Bloomberg.com this so-called bubble is simply from banks completing their foreclosures and holding onto inventory. The increased value of properties has been attracting various investors and speculators, which is helping fuel this latest rise in real estate prices.
Experts say once banks start releasing the foreclosed homes into the market to start selling them, the prices may begin to get depressed again.
In Las Vegas alone, more than half of properties with mortgages are still underwater, or worth less than the loans against them, according to Zillow Inc., a real estate data firm. Trendy hotels like SLS Las Vegas are set to open in 2014, in an effort to reinvent the city as purely an entertainment paradise.
One local said “The reality is, people just won’t fly to the middle of a desert to play some slots, watch shows and sit down for some blackjack when they can drive right near their town or city, or play legally online.”
And now it looks like the feds may soon allow online gambling across the United States.
Last May, the American Gaming Association called on Congress to enact federal legislation that would allow states to license and regulate online poker so Americans who play can do so safely using responsible, law-abiding operators. The Department of Justice made a decision that the Federal Wire Act only prohibits the transmission of communications relative to bets or wagers on sporting events or contests. It also clarifies that intrastate lottery tickets sold online are legal, so long as the lottery games do not involve sport wagering, even if the transmission crosses state lines.
Officials say this has opened up the possibility that online gambling may get approved on a federal level.
New Jersey is the third state in the U.S. to have authorized internet gambling. However, these online casinos are owned and controlled by Atlantic City casinos in an effort to boost profits in the face of fierce competition.
California, Hawaii, Illinois, Iowa, Massachusetts, Mississippi, Pennsylvania and Texas are hoping to join Delaware, Nevada, New Jersey and the U.S. Virgin Islands in offering online gambling to their residents.
Nevada also enacted modifications to their internet gambling law to allow for interstate compacts, among other provisions in hopes to draw higher stakes jackpots, similar to the Mega Millions and Power Ball lottery games that are played in multiple states.
With this in mind, it seems the niche that Las Vegas and Atlantic City once offered as a gambling and entertainment hub is heading toward the dustbin of history.
Time will tell if these two cities will end up like Detroit. However, the fact that they are losing their biggest industries to major competition, much like Detroit did, with depressed housing, casinos bankrupting/closing and businesses fleeing, makes their fate seem eerily similar.