A long experiment with legalized gambling, launched in 1976, has failed to reenergize this once-iconic locale, which fell into seedy decline as tourists started turning away in the 1950s.

Today, Atlantic City, with a year-round population of 40,000, teeters on the edge of bankruptcy and economic collapse. Though Atlantic City was touted as a family resort in its early days, much of its popularity even then stemmed from illegal entertainments such as gambling and prostitution. Born from a physician’s dream to provide a place for healthy leisure, Atlantic City metamorphosed into a town “dedicated to the fast buck,” governed by dangerous racketeers and corrupt politicians, as Nelson Johnson, author of Boardwalk Empire: The Birth, High Times and Corruption of Atlantic City, puts it. That summer wasn’t unusual: over the decades, officials in the New Jersey shore town would regularly tussle with state and federal investigators while operating what newspapers dubbed an “open city”-or, during Prohibition, a “wet city”-where the laws that other municipalities followed simply didn’t apply.

Calling the city’s defiance “one of the most remarkable situations that ever existed in an Eastern state,” the Times quoted local officials saying that even if they tried to enforce the state rules, no jury of local citizens would indict or convict the offenders because most felt that Atlantic City’s mission was to “attend strictly to the entertainment of our visitors”-and that meant offering gambling and booze seven days a week and letting brothels operate openly. In the summer of 1908, a New York Times story described how the renowned vacation spot Atlantic City had nullified state laws restricting gambling and alcohol.

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