This is great news for North Jersey gaming, but even with new Legislation, if it isn’t specific enough; the referendum will fail. Assemblyman Caputo is on point, that Atlantic City, Seniors and the disabled, need to know what they can reasonably expect, from North Jersey gaming.

Why not establish the Pennsylvania tax rates for developers; as this would level the playing field with North Jersey’s principal competition; while producing probably in excess of $400 million annually in new taxes. Then determine what percent is going to Seniors and the disabled (that have lost $1.8 billion,since PA approved slots in greater Philadelphia). And tell Atlantic City what their share is going to be for giving up a monopoly; that was effectively lost in 2006.

And the PA tax (55% on slot and 16% on table win), could apply to the more expensive Jersey City casino, by giving development credits; against the win tax; for amounts spent above the $1 billion minimum investment in the referendum.

The other critical component for a successful referendum, is to severely limit the possible locations; preferably just the two that have developed plans, the Meadowlands and Jersey City. This would prevent NIMBY (Not In My Back Yard) from prompting a no vote from residents in communities, that would still be in play. That was the primary reason the referendum failed in 1974 (60% to 40%); where every county could have a casino.

The beauty of this plan, is the Meadowlands could be operational, within a year; probably 4 to 5 years before NY could act in Manhattan. And paying substantial taxes as early as 2017.

I recently prepared a study of county populations in Eastern PA, New Jersey, NY City and the NY Counties of Orange, Westchester, Nassau and Suffolk. The Meadowlands has over 6 million persons, that are closer to the Track, than and other gaming establishment. That is the same sized convenience market, that permits Aqueduct to win $800 million at a race track with only slot machines.

But with table games, a large showroom, multiple restaurants and lounges, and better access to Manhattan (by car,bus,limo and rail); a Meadowlands casino could easily surpass the Aqueduct revenues and possibly surpass the $1 billion mark.

And being only 15 minutes from Manhattan, the North Jersey casinos would benefit from the visitors, staying at Manhattan’s 98,726 hotel rooms. Both the Meadowlands and Liberty Rising would benefit enormously on slower mid-week nights, with probably 5% to 10% of the estimated 20 million annual business men,and convention/trade show attendees; looking for something different to do during the evening hours. And if you add in the weekend tourist, the total Manhattan Hotel visitor numbers come closer to 35 million annually. (Using 80% Occupancy at 1.2 guests per room mid-week; and 60% week end occupancy at 1.9 guests per room).

Those concerned citizens of South Jersey, have to realize that the Atlantic City’s business model has to move toward that of the Strip in Las Vegas; where casino revenue is less than 35% of total revenue, while AC’s is still 70%. The big difference is the larger Strip resorts are making 73% of their operating earnings from the once forgotten departments; rooms, food, beverage, convention, entertainment an retail. The Strip learned about the value of the convention/trade show business; that fills rooms mid-week. All you have to do is look at booking web site, and compare the Saturday night room rate for AC casinos, with that of Tuesday night. Frequently, in the Fall, Winter and Spring; the mid-week room is 80% to 90% cheaper. Add to that, that AC casino resorts comp. more than 50% of their room, food and beverage revenues; plus give away $ millions in free play, and you see a business plan that needs redirection.