Atlantic City's fortunes wane as gamblers decamp

ATLANTIC CITY, N.J. -- In January, the Atlantic Club Casino Hotel was the first casino to announce it is closing its doors. Then in June, Caesars Entertainment Corporation announced it was shutting its Mardi Gras-themed casino Showboat. Also, the two-year-old Las Vegas-style mega casino Revel, which has never turned a profit, announced it is filing for bankruptcy. Most recently, the Trump Plaza notified their employees it expects to shut down in September. Together, those casinos make up more than 6,000 jobs or 20 percent of the work force.

Melanie Gillespie has been a cocktail waitress at Showboat for 18 years. She has already been warned she could be laid off by the end of August. "Well I have to do something. I have a daughter to raise. And you know, we need health benefits. So I'm willing to do anything I have to so that my family stays afloat," she says.

Don Guardian is the mayor of Atlantic City. Over the course of seven months, his city will lose more than 3,000 jobs. "And we're only going to be replacing them with 600, 700 jobs in the next year."

When legalized in 1976, gambling was supposed to reclaim the allure of New Jersey's boardwalk empire.

But competition for online gambling and out-of-state casinos like New York's Empire City has hurt Atlantic City's bottom-line.

There are now 35 casinos within driving distance of New Jersey. The city's casino revenue has plunged from a high of $5.2 billion in 2006 to just $2.9 billion last year.

Mayor Guardian says the key to a comeback in Atlantic City is to provide more entertainment than just gambling. Las Vegas has successfully did that more than a decade ago, and now gaming accounts for less than half of its tourism dollars.