New Jersey Gaming Committee Chair Urges Voters to Support Casino Expansion

New Jersey Gaming Committee Chair Urges Voters to Support Casino Expansion

I happen to be one individual, that doesn't have a special interest in the North Jersey casino referendum.But I have a profound interest in the outcome, having been part of the successful 1976 vote, that approved casinos for Atlantic City; and assisting the Legislature and AG's Office in drafting the Casino Control Act. And one reason we were successful in 1976 after a similar referendum failed 60% to 40% two years earlier; is that we restricted gaming to only one community; but the tax benefits would go to programs supporting NJ Seniors and the disabled. Those funds are now suffering losses of over $200 million per year, as a result of AC's casino revenue demise. And much of this loss has come from New Jersey citizens, who now find it more convenient (especially mid-week) to visit casino in Eastern Pennsylvania or the Slots at Yonkers and Aqueduct. But does North Jersey need two casinos; especially when one community, that wants a casino, could be operational within a few months to a year? Even though Paul Fireman, wants to build a $4.6 billion project in Jersey City, we do not know if a city, with 262,000 citizens, would overlook traffic concerns and say yes. East Rutherford, a community with only 9,000 residents, has already said they want gaming; but in this community the citizens are on high ground, away from the many attractions already existing at the Meadowlands; the Met Life Stadium, the Ixod Arena, the site of the NJ State Fair, the Harness Racetrack and the under construction American Dream mall, featuring more entertainment and other options, that the typical mall. But for a positive vote, I believe the Legislature has to come forward, before the vote, and severely restrict, the communities that could have a license, and determine the tax rate on slots and tables, so that Seniors and Atlantic City can estimate the revenue they might anticipate from North Jersey gaming.The Meadowlands Race Track has already proposed a 55% tax on slot win, a number that would not work in Jersey City for a $4.6 billion project. If the PA rates were introduced (55% on slots and 16% on tables); AC and seniors should each receive $200 million or more annually; with the negative impact from a new casino being felt most severely in Eastern Pennsylvania and New York, while bringing NJ resident spending back home. Atlantic City will continue to be a Weekend casino destination, and will keep occupancy at reasonable levels mid-week during July and August. But, having already lost the convenience factor to 95% of its previous customer base (500 thousand out of over 20 million persons); AC is fortunate that the casino revenues are not down even more. What the AC resort industry must now do is follow the example of the bigger LV Strip properties, where the casino department produces 35% of the total revenues (down from over 70% in the past) but only 27% of departmental income. However, looking at the rooms department, even though it only produced 27% of the resort revenue, it has a departmental margin of 63% and contributes 40% to the overall departmental income; with the convention/retail department adding another 20%. Just look at occupancy and room rate differential between the AC Boardwalk (77.1% at $92 in 2015) and the 23 larger Strip properties (92.1% at $163 for their year end 6/30/2015) So Las Vegas has reduced its dependence on casino gaming, by attracting conventions and trade shows, that fill those mid-week nights with full rate business, profitable functions, high margin convention space rentals; while replacing casino comps, with full rate customers in the gourmet restaurants, and reducing the need for other promotional inducements, like free play and 90% room rate discounts (like we now see 200 nights a year in AC; mid-week in the off season). We just need to change direction and promote new air service to support the convention trades. Lets not forget, NJ Seniors programs are now loosing over $250 million annually since Pennsylvania introduced slots is Philadelphia in 2006.