Thomas Donlan of Barron’s turns his attention to New Jersey’s recent experience with casinos.

A thing worth doing is worth overdoing. Or is it? Thirty-six years after casinos came to Atlantic City, the growth of gambling is coming to the end of its string. There are 12 casinos, but four have closed this year and a fifth teeters on the brink. …

… In 1976, the state legislature and New Jersey voters approved a constitutional amendment allowing casinos in Atlantic City only. The honest supporters were hoping to reverse Atlantic City’s long economic decline. The first casino hotel opened in 1978. With the only legal casinos east of Nevada, Atlantic City looked like a money machine, and Wall Street responded with a speculative mania for casino stocks.

For a time, casinos were big money-makers indeed, but competition began to appear in the late 1980s. First the federal government legalized gambling establishments run by recognized Indian tribes, then New Jersey’s example prompted legalization of gambling in other states. The American Casino Guide now counts 835 American casinos in 46 states.

Since 2007, Atlantic City casino revenues have dropped by 50%. The Atlantic City area, with a labor force of about 141,000 has a 13% unemployment rate, counting the effect of the 8,000 jobs lost at the four casinos. Poverty and run-down housing are still the city’s biggest problems, even though casinos were supposed to bring a new dawn of prosperity.

Gambling is an ugly business that appeals most to crooked politicians. Even if it’s called “gaming,” it’s gamy. Gambling is also a stupid business. Anyone who can calculate odds does not go to a casino to get rich.

The only reasonable argument for legal casinos is the argument for legal drinking, legal smoking, legal prostitution, and legal drug-taking: Personal liberty is more important than the consequences to those who can’t handle it.

We find that freedom-loving philosophy appealing, but we remain free to judge the people in the casino business and the politicians who enable it. They are morally defective. It’s one thing to tolerate your neighbor’s unattractive habits; it’s a nastier thing to run a business that provides the satisfaction of his cravings.