New Jersey Democrats Race to Get Casino Expansion on 2016 Ballotby
Bergen County senator says talks focused on timing, strategy
Meadowlands operator says his plan would bring in $500 million
Democrats who control the New Jersey legislature are in talks to get a measure on the November 2016 ballot that would ask voters to allow casinos outside Atlantic City.
The move requires an amendment to the constitution, which limited gambling houses to the seaside resort at the state’s southern end nearly 40 years ago. State Senator Paul Sarlo, a Democrat from Wood-Ridge in Bergen County, said allowing gambling in other towns is crucial to reclaim tax revenue that has gone to New York and Pennsylvania.
“The only way we’re going to be able to compete with surrounding states and provide a meaningful amount of dollars to Atlantic City is to expand gambling to the North Jersey market,” Sarlo said Monday in a telephone interview.
Atlantic City has been pushed into state financial oversight after losing its onetime dominance over East Coast gambling. Casino revenue declined to $2.9 billion in 2014 from a peak of $5.2 billion in 2006 as Pennsylvania, Delaware, Maryland and New York expanded gambling. So far this year, total revenue is down 10 percent from last year, when four of 12 casinos closed. The remaining eight include three properties operated by Caesars Entertainment Corp.; The Tropicana owned by Las Vegas-based Tropicana Entertainment, as well as others such as the Borgata Hotel, Casino & Spa.
Governor Chris Christie, a second-term Republican running for president, has struggled to revive the coastal community of almost 40,000 people, about one-third of whom live in poverty. After years of refusing to consider a northern expansion of casinos, Christie said this year he would be open to the idea if some of the new revenue went to Atlantic City. even so, constitutional amendments don’t need the governor’s approval.
The proposal lawmakers are discussing would redirect a portion of the proceeds to Atlantic City, Sarlo said. The number of new gambling houses and their locations are still under discussion, he said.
Lawmakers are discussing whether to hurry to approve the referendum in the final weeks of the session, setting up a final vote by August, Sarlo said. A referendum can pass with simple majority votes in two straight years or with one three-fifths vote.
“It’s going to happen; everyone’s convinced about that, and now it’s just about the final details,” said Assemblyman Ralph Caputo, a Democrat from Belleville in Essex County and a former 20-year casino executive. Caputo, who worked at casinos including the Trump Castle Hotel and Casino, Tropicana and Showboat, said opponents of expanded gambling are dooming the industry to extinction, and cutting off a flow of money to New Jersey’s treasury.
“Their solution is what: Keep the casinos going and four of them will make money while four won’t? What happens next year -- three make money and five don’t?” he said. “Some people are going to take a provincial view, but this is a new source of resources.”
Both Sarlo and Caputo said the full economic impact of expansion is unclear. They said adding the casinos in the populous northern section of the state would allow it to tap into gamblers who would otherwise travel to New York and Pennsylvania.
Jeffrey Gural, a New York real-estate executive spearheading the effort to construct a casino at his Meadowlands Racetrack in East Rutherford, said a gambling expansion would help Atlantic City and the state’s struggling horse-racing industry. Tracks have suffered as the gambling proceeds that fund purses have shriveled, and increasing the pot of money would help both sides, he said.
Gural’s current plans call for a Hard Rock Casino attached to the racetrack as part of a project he said would create $500 million a year in tax money and “a couple of thousand jobs.” He said he’s agreed to pay the higher Pennsylvania tax rate of 55 percent on slot machines and 14 percent on table games instead of the 8 percent casinos in Atlantic City now pay.
“Everybody recognizes the town has to be rebuilt and they have to find a way to avoid default,” Gural said in an interview. “The customers we’d see are not going to go to Atlantic City. The reality is that it’s only going to get worse for Atlantic City.”