Calls are coming from both sides of the aisle as well as from unions to put the question of expanded gambling in New Jersey in front of voters in November 2016. Currently the former #2 gambling destination in the world, Atlantic City, is the only place in the state allowed to offer casino gambling.

Democrats and Republicans in the Assembly and Senate have advanced bills to allow gaming to expand beyond the legendary shore city, but they have yet to come to agreement on an important issue – who will own the new casinos.

The Senate was first to introduce a bill. It would allow two casinos, owned by existing Atlantic City operators, to be built outside the city; one at the Meadowlands Racetrack in East Rutherford and one in Jersey City.

Last Wednesday, Assembly Democrats introduced a competing bill that would allow one casino to be owned by an existing A.C. interest and offer a free-market license up to bid for another casino.

The two bills also offer different amounts of tax revenues to Atlantic City, a provision designed to mitigate losses to competition the city’s remaining 8 casinos may face. The Assembly bill offers less.

Tuesday December 22 saw an important deadline pass in the legislative process. One that would have required only a simple majority in two legislative sessions to place the measure on the ballot for voters to approve a change in the state’s constitution. Now it will require a three-fifths majority in the session beginning in January, making it much harder to pass.

The Senate bill is backed by Senate President Steve Sweeney and supported by at least two union leaders.  Backers of both bills call their measures a compromise.

The missed legislative deadline may make it impossible for the Assembly bill to pass. Allowing one of the two casinos to be open to outsider bids, along with less money for the struggling city will be a much harder sell to lawmakers representing current Atlantic City interests. Unless compromise is reached soon the possibility of a Hard Rock Casino at The Meadowlands seems much more distant, regardless of who wants to be its champion.

 

 

One Response

  1. Steven Norton

    The New Jersey Legislature should take into consideration which casino bill would be the quickest to get North Jersey gaming in operation. Obviously, that is the bill that allows Hard Rock to partner with the Meadowlands, offering a tax rate of 55% on slot win. This location has superior access to all of North Jersey, as well as Manhattan, Staten Island and Orange Co., where NY missed it’s best casino opportunity in recent bidding, preferring to protect the Catskills.
    NJ Slots could be in operation within months of the referendum, if the proposed Legislation eliminates
    the requirement that both North Jersey casino have to have Atlantic City operators.
    Atlantic City has several casino developers, notably Carl Icahn, that have the balance sheets to built a destination resort; but that would be more appropriate for a second North Jersey casino, because of the timing to go thru the bidding, approval and construction of a new facility; probably 3 to 5 years.
    It’s debatable whether Atlantic City’s share of North Jersey casino tax revenues, will offset further declines in AC profitability; but it’s undeniable that future casino development in Maryland, Pennsylvania and New York will. Most of the casino win of North Jersey gaming will come from East PA casinos, Parx,
    Sands Bethlehem, the Poconos; and being more convenient to Manhattan and Staten Island, from Aqueduct and Yonkers’s slots.
    Atlantic City has to find a new type of business, that prefers mid week dates, and avoids the months of July and August. That is conventions, trade shows, corporate meetings and association events, that would provide overnight demand for rooms, functions, gourmet restaurants and function space rental; all at full rates, that provide profits aside from the casino. Just look at Internet booking sites,during the off season, and you will find mid week rooms for $30 or $40 per night, that sell for $300 or more on summer weekends.
    Just compare the Venetian/ Palazzo in Vegas with AC’s top properties. Venetian occupancies are at least 10% higher, room rates more than double, and casino promotional allowances about half. And they do it with group business.
    In Atlantic City, convention business can provide full rate demand on 200 mid week nights per year, in the Fall, Winter and Spring; turning the rooms and other departments into meaningful profit centers. And each meeting attendee, whose travel expenses are covered by his employer, is more affluent and has more disposable income, than the day trippers he will be replacing in the casino.
    All that AC is missing, to become a year round resort, is Air service into AC International; and the funds from a North Jersey casino could subsidize air start up, and help to promote it.

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