North Jersey Casino Expansion Will Go to Public Ballot November 8
Posted on: March 15, 2016, 06:24h.
Last updated on: March 15, 2016, 06:28h.
The topic of North Jersey casino expansion is going to the people: New Jersey residents will vote November 8 on the controversial question of casino expansion beyond Atlantic City in their state.
Both houses voted overwhelmingly in favor of a bill which will allow voters to decide this fall on whether to break Atlantic City’s longstanding monopoly on casino gaming in the state.
The passage of the legislation was described as “historic,” by one of its main sponsors, Assemblyman Ralph Caputo (D-Essex) on Monday. But many in Atlantic City fear that expansion in the north could kill off the already struggling seaside resort, which has lost a quarter of its casinos and some 8,000 jobs in the past two years.
Atlantic City Bankruptcy Warning
Last week, bond credit rating analysts at Moody’s Investors Service warned that the city could run out of money within weeks, unless two bills under consideration in the New Jersey legislature are passed. That legislation that would give the state the power to intervene in the city’s financial affairs.
Meanwhile, proponents of North Jersey expansion believe that opening up competition would actually come to Atlantic City’s aid. The bill pledges to give up to $200 million to the city per year, a sum derived from taxes on the new casinos in the north, as compensation for ceding its 40-year monopoly.
It proposes two new casino licenses in the north of the state, where lawmakers believe gaming businesses could be more competitive, in theory attracting customers to New Jersey from across the Hudson.
Hard Rock International is known to be interested in building a casino in partnership with the Meadowlands Racetrack in East Rutherford, home to the New York Giants and New York Jets. There have also been proposals for a project on the waterfront in Jersey City, directly across from Lower Manhattan.
Still No Taxation Figures
Should voters say yes in November, Atlantic City’s current gaming operators would be offered first refusal on the two licenses, after which the bidding process would be opened up to companies from outside the state. Developers would be barred from building a casino within 72 miles of Atlantic City.
But there remains concern that despite its promises of compensation, the new bill has set no taxation levels for the proposed properties, and many are asking how a decision could possibly be reached without these figures.
Some lawmakers have warned that New Jersey is playing with fire with its expansion ambitions and that the north is not immune to the market saturation that has been visited on Atlantic City by the casino expansion in abutting states.
“What happens to North Jersey casinos when New York City inevitably gets one?” demanded State Senator Jim Whelan recently.
It’s all down to the ballot now, and a poll last week suggested that New Jersey voters are very much divided on the issue. According to a survey by Rutgers-Eagleton, 49 percent of New Jerseyans said casino gambling should continue be limited to Atlantic City, while 44 percent believe it should be allowed elsewhere.
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Assemblyman Ralph Caputo is correct that one or two casinos in North Jersey, will help the State and could prove beneficial to Atlantic city. What AC needs to do with its revenue share is to underwrite commercial air service into AC International, that would make it possible to reach new markets and easier to promote the convention/ trade show markets, like the strip resorts in Las Vegas. The meeting trades primarily meet mid-week, and usually not in the summer months, a perfect fit for AC resorts. And the attendees pay rack or posted rates for rooms and meals, no discounts, comps or free play required. This kind of business would substantially increase room rates, turning that department into a meaningful profit center; while greatly reducing the discounting and the costs of promotional allowances, needed to induce mid week casino demand. And even though many conventioneers do not gamble, many do, and the profit margin on these customers is greatly enhanced without the need for free play and other freebies. With casino gaming now closer to 95% of AC's previous markets, we can no longer expect 10 to 20 casino visits a year, like in the past, and most will now come on weekends, when our casinos already do good business. And our old line run busses from Manhattan and North Jersey, are now going to Sands Bethlehem. We need air service bringing persons to Atlantic City and South Jersey, not the kind we now have, providing cheap flights for South Jersey and Philadelphia residents to various Florida resorts.