Resurrecting the idea of a casino at the Meadowlands

Posted: July 21, 2012

EAST RUTHERFORD, N.J. - Controversial flames are being fanned once again for a casino here at the Meadowlands Complex.

The revenue travails of Atlantic City, particularly this summer's disappointing early returns at the new Revel casino on the Boardwalk, are proof that New Jersey needs to expand gambling beyond the Shore resort, proponents of a Meadowlands casino say.

The state Assembly's Regulatory Oversight and Gaming Committee held a special hearing Thursday at the racetrack's Hambletonian Room to resurrect the fight, now more than a decade old.

But Gov. Christie, who has invested significant political and financial capital in Atlantic City, and South Jersey lawmakers such as Senate President Stephen Sweeney (D., Gloucester) are just as committed to burying the idea anew, arguing that a Meadowlands casino would cripple an already hobbled Atlantic City. New casinos in Pennsylvania, New York, and Maryland have siphoned off business, they say, and intrastate competition will only exacerbate Atlantic City's decline.

Christie didn't mince words when asked about the hot-button issue: A casino in the Meadowlands simply "wasn't going to happen" under his watch.

"I think any conversation about extending gaming to the northern part of the state, or anyplace else in the state, is really a waste of time," he said Thursday from Trenton. "As a practical political matter, it's simply not going to happen. ... So all these people who are having hearings and everything, I guess they've got nothing else to do over the summer."

Added the Republican governor, who initiated a state-run overhaul of the resort: "We have made a five-year commitment to Atlantic City, and I believe we need to follow through in that five-year commitment ... and give them the opportunity to revitalize themselves. We're into our second year now. I'm certainly not going to change course. ... Atlantic City deserves to have five years to try to get itself revitalized, back on its feet, remake itself as a destination resort for folks who also want to enjoy gaming, as well."

Sweeney said he has no plans for a similar hearing in the Senate, or to post legislation that would expand gambling to the Meadowlands.

"We are in the early stages of implementing that legislation and revitalizing Atlantic City," he said. "We must let that revitalization happen first before we take any action that would endanger this effort."

Assemblyman Ralph Caputo (D., Essex) wants to see something happen, nonetheless, through a referendum. He is sponsor of a measure that would ask voters whether the state constitution - which since 1976 has limited casino gambling to Atlantic City - should be amended to allow casinos in Bergen County. He said he hoped to have it on the ballot in about a year.

"The reality is that Atlantic City is losing many of its North Jersey customers to newly opened casinos in Pennsylvania and New York," Caputo said in his opening remarks at Thursday's hearing. "We can continue to ignore that fact at our own peril, or we can move forward with a sensible statewide gaming plan that creates jobs and economic development."

The issue has divided lawmakers, and their differences were underscored in the statistics each side presented Thursday.

Caputo and other North Jersey legislators argued that a Meadowlands casino could generate anywhere from $750 million to $1 billion a year in new gaming revenue - with more than $350 million of that going to the state as tax revenue - as well as generating thousands of new jobs.

"Let's stop talking and start doing. Let's build one," said State Sen. Paul Sarlo (D., Bergen), whose district includes the Meadowlands and who was first to testify Thursday.

In 2012's first six months, Atlantic City's casinos generated $1.5 billion in gambling revenue, a 6.5 percent drop from the same period in 2011.

Perhaps just as deflating has been the disappointing start of $2.4 billion Revel, which finished eighth among the dozen Shore casinos in each of the three months since its April 2 opening. Revel generated $13.5 million in April, $13.9 million in May, and $14.9 million in June - about half of Wall Street's estimate of what was needed for it to stay solvent.

For Christie, Revel's numbers are particularly troubling, since the state kicked in $261 million in tax credits last year toward its completion.

State Sen. Ray Lesniak (D., Union), who sponsored legislation to allow sports betting and Internet gaming at Atlantic City casinos, has been championing a casino in the Meadowlands for two years.

Under Lesniak's plan, Atlantic City casino companies that do not have competing properties in New York or Pennsylvania could operate a Meadowlands gambling hall. That excludes Caesars Entertainment Co., which owns four casinos in Atlantic City and Harrah's in Chester, Delaware County.

Without a casino in the Meadowlands, "A.C. will continue to limp along and be a shadow of what it once was," said Lesniak, "and of what it could become again."

But Christie said he was standing firm on his revitalization plan for Atlantic City's casino industry and the state's four struggling horse tracks. The plan ended the annual subsidy that had been given to the tracks from Shore casinos in return for the tracks' not installing video lottery terminals (VLTs) or slots.

Instead, that annual subsidy now goes toward funding a five-year, $30 million-a-year rebranding campaign, launched in April, by the Atlantic City Alliance to market and emphasize the city's nongambling attractions.

"We're seven months into a five-year plan," said Tony Rodio, chief executive of Tropicana Casino Resort in Atlantic City and president of the Casino Association of New Jersey, which represents the 12 gambling halls. "You can't make a determination whether or not the plan has been successful yet. You have to give it more time."

Rodio said Atlantic City's casino industry generated about $1 billion in various taxes last year, employed more than 35,000 people, and helped finance programs for seniors and the disabled from an 8 percent tax on gambling revenue.

"The state derives a lot of benefits from Atlantic City beyond the gross gaming revenue," he said.

Las Vegas-based Caesars Entertainment - which owns Bally's, Harrah's Resort, Showboat, and Caesars in Atlantic City, is adamantly opposed to North Jersey gaming competition.

"A Meadowlands casino would cannibalize Atlantic City's gaming revenues at a time when the industry is investing tens of millions of dollars to transform and promote Atlantic City as an entertainment destination," said Gary Thompson, Caesars director of corporate communications. "The fallout would include the loss of untold numbers of jobs and a drop in state and local tax revenues from a city that generates hundreds of millions in such revenues annually. It's a bad idea."

Assemblyman Christopher A. Brown (R., Atlantic), whose district includes Atlantic City, testified that a Meadowlands casino would siphon customers from North Jersey and New York - which make up about 45 percent of Atlantic City's clientele - as well as those from the central part of the state.

"These are the very gamblers we need to continue to entice to Atlantic City to ensure there is sufficient gaming revenue to invest in non-gaming attractions," said Brown.

New Jersey's four race tracks - at the Meadowlands, Monmouth, Freehold, and Atlantic City - have all seen lower attendance and purses because competing states - Pennsylvania, Maryland, Delaware, and West Virginia - have bolstered purse money and lured top breeders with revenue from new casinos there.

Barbara DeMarco, a lobbyist who represents racing and gaming interests, said that the four tracks "suffer from the same competition from these 'convenience' gaming locations" and that they want the option to install slot machines or VLTs at their sites, now that the subsidy has been eliminated.

"People want a variety of options," DeMarco testified. "It is the same as an ice cream parlor offering only vanilla ice cream. People want choices."


Contact Suzette Parmley at 215-854-2594 or sparmley@phillynews.com.

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