On Monday the New Jersey Assembly judiciary committee approved a resolution forwarding a bill to the legislature that will allow voters to authorize two casinos in the northern part of the state. Missing from the language were tax rates and potential locations for the two casinos. The Senate committee forwarded the bill by a 6-2 vote. The Assembly passed it to the floor in the most recent vote.

Some lawmakers questioned the logic in passing a bill without details saying the public needs to know what they are going to be voting for. One of the sponsors of the bill, Vincent Prieto, said the details would emerge in “enabling legislation” that would be passed later. Once passed by both houses and signed by the governor, voters will have the opportunity to change the state constitution when they go to the polls in November’s general election.

Although the language regarding locations for the potential casinos has not been hammered out, the forwarded bill does dictate that they be at least 72 miles from Atlantic City and in separate counties. The two top contenders under that provision would be the Hard Rock at the Meadowlands racetrack in East Rutherford, and Reebok founder Paul Fireman’s Liberty Rising Resort and Spa near Liberty Park in Jersey City. Locations at Sayreville, Edison, and Woodbridge in Middlesex County would be eligible, but Freehold and Oceanport would not qualify.

A new amendment requires a minimum $1 billion investment, which likely narrows it down to The Meadowlands and Liberty Rising. Meadowlands Racetrack and Entertainment’s operator, Jeff Gural has proposed a tax rate of 55%. However his Meadowlands/Hard Rock consortium may need to bring on an existing Atlantic City operator to apply in the first 60 days of bidding – after that the requirement that at least one of the casinos involve an AC operator becomes nil. Another new amendment changed the time frame from 180 to 60 days. The Hard Rock proposal would come at a construction cost of about $1 billion, while Fireman’s Liberty is estimated to be a $4-5 billion project.

Freehold Raceway is opposed to the current bill due to the lack of clarity in the potential tax rate. Regardless of the final number, 2% of it will go toward helping the state’s struggling horse racing industry, while another 2% would go to the host communities. The lion’s share would be split between Atlantic City and tax relief and social welfare programs. The payments to Atlantic City were crucial to getting the bill passed and are intended to offset losses expected by Atlantic City casinos due to increased competition.

The bill will now sit idle for 20 days before coming to a vote. If passed by a three-fifths majority of both houses the bill will appear on the ballot in November.

 

 

 

 

One Response

  1. Steven Norton

    Representative Brown is correct to oppose a bill to approve gaming in North Jersey, until a casino tax rate is included. Today’s article says that the Pennsylvania casino tax rate is 55%, the amount proposed by Meadowland’s operator Jeff Gural, but this tax only applies to slot win. PA has a separate tax on table game win of 14%. Senate President Sweeney has indicated a need for a tax rate, lower than 55%, in order to attract $ billion investments in new resort casino facilities, but the new casino, under construction near Washington DC, is scheduled to cost over a $ billion, and the Maryland taxes actually higher than Pennsylvania. Since this Legislation would remove the NJ casino monopoly from Atlantic City, the shore resort needs to know how much it is getting for giving up an exclusive license, that has already been lost to other Eastern gaming. In spite of gaming’s approval in DE, WV and CT, Atlantic City continued to grow, but slots in Eastern PA, and at Yonkers and Aqueduct, started the decline that has taken more than 50% of AC’s gaming win over the past decade. Since 2006, PA has added table games and Maryland, both slots and tables. New casinos are scheduled in MD, this year and Philadelphia and the Catskills in a couple of years.
    Deutsch Bank needs to be more realistic than $500 million in win for a North Jersey casino, when realizing that a location like the Meadowlands is convenient to 6 million residents of New Jersey, plus more convenient for citizens and visitors to Manhattan and Staten Island.
    Eastern PA casinos are currently winning over $1.3 billion as are the two racinos around NY City. Slots alone at the Meadowlands should exceed $750 million and with tables at a lower tax rate, pass the $ billion mark; assuming the complete entertainment experience proposed there by Hard Rock. Some of this win will come from AC, but the great majority from Eastern PA and NY’s metro racinos. If North Jersey adopts the PA tax rates, and a third goes to AC, then the casino resort should have $150 million annually to become a more inclusive resort destination, like the Las Vegas strip, one that can compete for mid-sized conventions and trade shows and profit from all revenue streams, not just gaming.

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