CORRECTED-Atlantic City shows gambling isn't recession-proof

(Corrects 12th paragraph of March 15 story to show Pinnacle property is not for sale)

By Jon Hurdle

ATLANTIC CITY, N.J., March 15 (Reuters) - In the 20 years he's worked on the Atlantic City boardwalk, Joe Lochs has never seen business this bad.

Lochs, 54, makes his living giving rides to casino patrons in a "rolling chair," a three-wheeled, wicker-sided buggy that he pushes up and down the boardwalk between casinos, shops and restaurants.

In good times, he can make $1,000 a week but since the beginning of winter, business is off by around 60 percent, and some days, there is no work at all.

Business at Atlantic City's 11 casinos is falling at a record pace. Aggregate revenue plunged 19.2 percent in February from a year earlier, the sharpest decline in the 30 years since gambling was legalized in the city, according to the New Jersey Casino Control Commission.

"Before this year, I never had a day without a single ride," Lochs said, rolling a cigarette outside the bankrupt Trump Plaza casino. "This year, I've had three of them."

Nearby, six of Lochs' competitors dozed in their chairs as potential clients strolled by in the late-winter sunshine.

Like everyone else in New Jersey's gambling capital, Lochs has been hit by the contracting national economy and by increased competition from a growing gaming industry in surrounding states, particularly neighboring Pennsylvania, where casinos allow slot machines but not table games.

"We no longer have this total monopoly on the market," Lochs said.

DRIVE TO DIVERSIFY

Along the Atlantic City Expressway, Pinnacle Entertainment (PNK.N) ran tongue-in-cheek billboard ads that said "You know what this town needs? Another casino."

These days, it's no joke.

Three of the city's casinos, those operated by Trump Entertainment TRMP.PK, are in bankruptcy following a court filing by Trump on Feb. 17. Two new resorts planned by Pinnacle and MGM Mirage (MGM.N) have been scrapped because financing is unavailable in the tight credit market.

Pinnacle said its plans for a $1.5 billion beachfront resort had been postponed indefinitely and that it may consider selling the land once the economy improves.

Revel Entertainment is moving ahead with plans to build a $2 billion resort but the project has been delayed because of difficulty securing financing.

Michael Pollock, managing director of consulting firm Spectrum Gaming Group, said Atlantic City was experiencing an unprecedented downturn but that doesn't mean its fortunes won't improve.

Projects like Revel, which combine gambling, entertainment and hotel accommodation, are crucial to Atlantic City's future, Pollock said. That formula has been followed by the city's newest resort, the Borgata, which has fared better than its competitors.

Even after the economy recovers, some of Atlantic City's traditional visitors will be lost permanently to other states, Pollock said. But development that attracts people other than gamblers could help restore the city's fortunes.

Jeff Vasser, president of the Atlantic City Convention & Visitors Authority, said the city is adding restaurants, spas and entertainment venues to diversify its economic base.

At Bally's Wild Wild West casino, where a faux Western facade advertises "Mining Claims" and "Hangings on Tuesdays," Robert Beleski was outside taking a cigarette break because smoking is now banned on casino floors, a city regulation that critics say also has harmed business.

Beleski, 38, used to be a craps dealer but has recently been trying to sell timeshares in vacation properties to casino patrons. A year ago, he persuaded about 45 potential clients a week to visit his sales office. Now it's down to eight or nine.

"I haven't had a commission check in six months," Beleski said.

He's considering going back to the casino tables to make a living. (Editing by Daniel Trotta and Stacey Joyce)