State’s vot­ers con­sider al­low­ing casi­nos out­side of At­lantic City

Plan aims to re­cap­ture rev­enue lost to N.Y., Pa.

Daily Freeman (Kingston, NY) - - OBITUARIES - By Wayne Parry

New Jersey vot­ers will de­cide Tues­day whether to al­low casi­nos out­side At­lantic City for the first time in the state’s 38-year his­tory of le­gal­ized gam­bling.

The aim is to build two new casi­nos in the north­ern part of the state, near New York City, in an ef­fort to re­cap­ture gam­bling rev­enue lost to casi­nos in Penn­syl­va­nia and New York; prop up strug­gling At­lantic City and the horse rac­ing in­dus­try; and fund pro­grams for se­niors and the dis­abled.

Even sup­port­ers, though, con­cede the ques­tion is un­likely to pass. Op­po­nents say adding new casi­nos to an al­ready over­sat­u­rated mar­ket could cause at least three of At­lantic City’s re­main­ing seven casi­nos to close.

What’s more, the pro­jected ben­e­fits of the new casi­nos are not backed up by any­thing con­crete be­cause key ques­tions, in­clud­ing the rate at which the casi­nos would be taxed and how the re­sult­ing rev­enue would be divvied up, re­main unan­swered.

A look at what’s be­ing pro­posed:

Where?

The ref­er­en­dum does not spec­ify where the casi­nos would go, only that they be in sep­a­rate coun­ties at least 72 miles from At­lantic City. The most fre­quently men­tioned lo­ca­tions are the Mead­ow­lands sports com­plex in East Ruther­ford, where race­track op­er­a­tor Jeff Gu­ral and Hard Rock International have pro­posed a casino, and in Jersey City, across the Hud­son River from Man­hat­tan, where footwear mag­nate Paul Fire­man has pro­posed a casino cost­ing as much as $4 bil­lion or $5 bil­lion.

Vast other ar­eas of the state re­main el­i­gi­ble, though. Late last month, the Berger Or­ga­ni­za­tion, which owns land and build­ings in Ne­wark, pro­posed a casino in New Jersey’s largest city.

How much?

The big­gest ques­tion is how much the new casi­nos are likely to earn — and pay. In­dus­try and Wall Street an­a­lysts have told The Associated Press the new casi­nos could be among the most suc­cess­ful in the coun­try, as long as New York City doesn’t al­low a casino nearby shortly af­ter­ward.

Gu­ral es­ti­mates a Mead­ow­lands casino would take in $800 mil­lion to $900 mil­lion a year from gam­blers, rank­ing it among the most suc­cess­ful in the na­tion. Some an­a­lysts think a Mead­ow­lands casino could ex­ceed $1 bil­lion in an­nual rev­enue, at least be­fore it has a nearby com­peti­tor in north­ern New Jersey. But a Wall Street study pre­dicts the haul would be closer to $500 mil­lion a year.

The tax man

New Jersey law­mak­ers have res­o­lutely re­fused to set a tax rate for the new casi­nos, partly be­cause they can’t agree on what it should be. Gu­ral has of­fered to pay 55 per­cent, but state Se­nate Pres­i­dent Steve Sweeney has said that since the casi­nos would have to cost at least $1 bil­lion apiece, the tax rate would have to be much lower than that in or­der to keep them from fail­ing.

The tax rate di­rectly de­ter­mines how much money will be sent to help com­pen­sate At­lantic City for the in­evitable loss of business to new in-state com­pe­ti­tion. Money from taxes on the new casi­nos also would go to tax re­lief and pro­grams for se­nior cit­i­zens and the dis­abled; to the state’s horse rac­ing in­dus­try; and to mu­nic­i­pal­i­ties and coun­ties that host the casi­nos.

With­out re­li­able rev­enue es­ti­mates and a firm tax rate, no one can be­gin to ac­cu­rately es­ti­mate how much any of those pay­ments might be. At­lantic City’s casi­nos cur­rently pay an 8 per­cent tax and a 1.25 per­cent manda­tory re­de­vel­op­ment pay­ment on their rev­enues.

Who?

The mea­sure gives own­ers of ex­ist­ing At­lantic City casi­nos first crack at the two new li­censes. If they fail to apply within 60 days, the li­censes would be thrown open to any­one.

The odds

Pub­lic opin­ion polls have shown the ques­tion is not likely to pass, and Gu­ral and Fire­man have ended a costly lob­by­ing ef­fort on its be­half called OurTurnNJ, even though they still want to build their re­spec­tive projects. The tens of mil­lions of dol­lars lob­by­ing groups have spent for and against the pro­posal set a record, and spend­ing could top $40 mil­lion by Elec­tion Day.

The main op­po­si­tion group, Trenton’s Bad Bet, suc­cess­fully tied the casino ex­pan­sion pro­posal to New Jersey’s deeply un­pop­u­lar state gov­ern­ment. Its back­ers in­clude the Gent­ing Group, which owns the Re­sorts World Casino at New York City’s Aqueduct Race­way, which would be hurt by a casino in nearby north­ern New Jersey. Other foes in­clude south­ern New Jersey business and casino in­ter­ests.

What next?

If the mea­sure passes, law­mak­ers would have to pass “en­abling leg­is­la­tion” spell­ing out the de­tails it de­clined to de­cide be­fore the ref­er­en­dum, in­clud­ing the lo­ca­tion of the casi­nos, the tax rate, and how the rev­enue would be al­lo­cated.

If it fails, the ques­tion can­not be put back be­fore vot­ers for at least two years.

But one New Jersey law­maker, Demo­cratic Assem­bly­man Ralph Ca­puto, is al­ready plan­ning an­other way to ex­pand gam­bling to north­ern and cen­tral New Jersey by al­low­ing the state Lot­tery Com­mis­sion to au­tho­rize “video lot­tery ter­mi­nals” — es­sen­tially slot ma­chines — at race­tracks. But it’s been tried un­suc­cess­fully be­fore in New Jersey, and it would rely on a 34-year-old le­gal opin­ion ad­vis­ing that do­ing so would not re­quire the same sort of statewide vote that’s on next week’s bal­lot, some­thing sure to be chal­lenged by sev­eral of those with a stake in the out­come.

WAYNE PARRY — AP PHOTO

This June 24, 2016 photo shows a roulette ta­ble at the Golden Nugget casino in At­lantic City N.J. On Fri­day Nov. 4, 2016, a Stock­ton Univer­sity poll showed that a statewide bal­lot ques­tion on whether to au­tho­rize two new casi­nos in north­ern New Jersey was op­posed by 71 per­cent of New Jerseyans.

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