Nelson Johnson - Boardwalk Empire - The Birth, High Times, and Corruption of Atlantic City

At that time, New Jersey was struggling with statewide tax reform. A State Supreme Court decision on the funding of local public schools had made an income tax inevitable. Some proponents of gambling spread the word that legalizing gambling might eliminate the need for an income tax. To preclude such talk, the Atlantic City Press in almost lecturing tones told its readers, especially the politicians, “The state can expect to profit very little, if at all, directly, and gambling opponents and proponents alike know it … it should not even be mentioned in the same breath with an income tax. It must be sold on the very sound argument that it is a much needed stimulant for the capital investment that can bring Atlantic City back to its days of glory.”

Another pitfall was the specter of Atlantic City becoming a “Las Vegas of the East” with a casino on every corner and slot machines in supermarkets, drugstores, and gas stations. Somehow, Atlantic City was supposed to be better than Vegas. The reputation of mob influence and the garishness of Las Vegas were something to be avoided in a statewide campaign. With an almost fairy tale quality, Atlantic City’s leaders hoped to present a more dignified image. They talked of gambling in terms of class and elegance comparable to the low-key operations in the Bahamas and Monte Carlo. According to its supporters, Atlantic City was above doing business like Las Vegas. There would be no glitz or glitter or slot machine grind joints. Upon gambling being legalized, it would be quiet and sophisticated—civilized games of chance for gentlemen and ladies only.

A final concern for gambling proponents was the fear that were it limited to Atlantic City alone, other communities in the state might resent it and sabotage the referendum. The resort was prepared to share the opportunity with other communities in the hopes no one else would be interested. In an attempt to neutralize potential opposition, McGahn and Perskie proposed a referendum that would permit gambling casinos throughout the state. Upon approval of the initial constitutional amendment, gambling could be permitted in any community where the voters of both the municipality, and the county in which it was located, approved a second referendum. To prevent mob infiltration, casinos would be owned and operated by state government; no matter that no one in state government was experienced in operating a casino. They would simply adopt regulations and everything would go smoothly. As for new private construction, there wouldn’t be much. Casinos would be located in existing hotels or state-owned properties. Additionally, advertising would be prohibited and only properly attired patrons would be permitted to gamble. By creating such a frame in which to view their proposal, Atlantic City’s leaders hoped the opposition would have little basis for an attack.

In the report of a study released by the staff of the Senate Conference Committee in May 1974, the Byrne administration’s view of how casino gambling should work was outlined for the legislature. It was envisioned that the first casino would be built on the Boardwalk at the state’s expense. Following the initial casino, two others would be located in space leased from existing hotels. The hours of operation would be from 8:00 P.M. to 4:00 A.M. The sale of alcoholic beverages would be prohibited as would credit for betting by casino patrons. Private investment of any kind would be prohibited. A rosy picture typical of government, it was assumed the casinos would be staffed and operated by state employees—just one more task for the bureaucracy. The potential of gambling everywhere didn’t have the initial support of Governor Byrne and as the constitutional amendment began making its way through the legislature, Byrne made his thoughts known. Prompted by his Attorney General William F. Hyland, Byrne questioned the language of the referendum.

The governor suggested that gambling should be limited to Atlantic City. He went so far as to threaten opposition to the referendum legislation if gambling was permitted anywhere other than Atlantic City. Some observers believe Byrne was looking for a face-saving way out and hoped that by limiting gambling to the resort, he would alienate other regions of the state, killing any chances of the referendum’s approval. The resort’s leaders were beside themselves, but Steve Perskie refused to quit. Relying upon his personal relationship with Brendan Byrne, Perskie launched a private campaign that resulted in the governor’s modifying his position. Byrne agreed to support the referendum as proposed, provided that for the first five years after its approval, casino gambling would be confined to Atlantic City alone. It was a major concession, which only Perskie could have obtained.

With Byrne’s support, McGahn and Perskie were successful in obtaining the legislature’s approval for a constitutional referendum. In all, it took less than five months to get the question put on the November ballot. While McGahn and Perskie made their moves in Trenton, the folks back home did nothing. When the year began, the pro-gaming forces knew they would have 10 months to organize their campaign for the November referendum. They also knew they could expect opposition.

The New York Times and Wall Street Journal , together with most of the local newspapers throughout New Jersey, as well as the New York and Philadelphia television networks, had editorialized against legalizing gambling. Senior U.S. Senator Clifford Case, State Senators Anne Martindell, Raymond Bateman, and John Fay, and Assemblymen James Hurley and Thomas Kean had all fought the question whenever it was discussed in the legislature. Kean, the Assembly Minority Leader, was a vocal opponent. “You are talking about changing the very character of New Jersey. Gambling would become our primary business, we would become known as the gambling state, and all legislation would be discussed in terms of how the gambling interests feel about it.” Additionally, the state’s two highest law enforcement officials, Attorney General William Hyland and U.S. Attorney Jonathan Goldstein, spoke against the measure.

Jonathan Goldstein was a forceful spokesman for the opposition. Together with clergymen from the New Jersey Council of Churches, he spoke at hundreds of gatherings throughout the state. Goldstein barnstormed across the state with the local newspapers and radio stations spreading the word. Everywhere he went he warned that the only group that would benefit from the legalization of gambling was organized crime. “I am concerned that the very same interests which have allowed Atlantic City to deteriorate will be those who will be the sole beneficiaries of casino gambling.” Goldstein was one of the prosecutors of the Atlantic City Seven, and he had a keen grasp of the traditional partnership between local politicians and the racketeers. He played on the suspicions of the average voter that all gambling was controlled by the mob. To the average person, Goldstein’s comments had a ring of truth and with the exposure they received, it damaged the resort’s cause.

Aside from the crime issue, there was a second basis for opposition expressed by State Senator Anne Martindell. The resort didn’t deserve special treatment. According to Martindell, the State Constitution shouldn’t be amended to satisfy the needs of one city. Statewide referenda and the amendment of New Jersey’s most basic legal principles should be limited to issues of statewide concern. Martindell argued that if Atlantic City wanted to make a comeback, it should pull itself up by its bootstraps. Let it diversify its economy. Let it seek out light industry and commercial uses other than resort-oriented businesses. The resort wasn’t entitled to a quick fix. It should battle urban decay just as every aging city in the Northeast was battling to do. Speaking at a press conference on the Boardwalk several weeks prior to the referendum, Martindell stated, “I am concerned with the future of Atlantic City. I want the city redeveloped on a solid future, not the dangerous shifting sands of gambling. Plans, real plans, have to be made to attract a diversity of industry and investments in order to create new jobs to solve Atlantic City’s deep-rooted economic and social problems.”