New Jersey Sports Betting Highlights Why Atlantic City Officials Strongly Oppose Casino Expansion

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• Steven Norton October 27, 2018

  In 2012, I wrote a position paper on why New Jersey should approve a casino at the Meadowland's harness track. And the rational is even more important in 2018. New Jersey's effort to save play and taxes from new gaming in Pennsylvania and New York, was to approve online gaming. And in 2017, we have saved almost 10% of the amount lost; from the $5.2 billion won in 2006, the year that PA approved slots. But in addition to 5 casino closings and thousands of job losses, our NJ seniors and disabled have lost over $200 million, annually, for their Statewide programs. I still strongly believe that NJ should approve one casino in North Jersey, to effectively compete with PA and NY gaming, that has effectively taken so much from NJ's only casino location, as well as lost tax revenue, bankruptcies and industry job losses. The trade off for AC, allowing casino games elsewhere in NJ, is that some of the meaningful new State win taxes could be used to promote a partnership with those airlines that operate in the Southeastern US, for service into AC International. This new service accomplishes two things. One it opens AC to the convention trades, that prefer air to get to their meetings. And two, it provides a casino option to 40 million residents of the South, between Orlando and Virginia, where gaming is not available. Currently the Southern States have several options for casino play, Biloxi-Gulfport, Las Vegas and Tribal casinos in Alabama, North Carolina and Florida, along with slots at many FL racetracks. But with air service, Atlantic City could favorably compete for players from Atlanta, Charlotte, Richmond, Norfolk-Virginia Beach, Raleigh-Durham, Roanoke; and even Southwestern cities, like Dallas and Houston. We could offer cheaper air fares, and lower room rates than Las Vegas, which enjoys over 90 flights a day (6 or 7 non stop), just from Atlanta's Hartsfield. Air service would allow south Jersey and Atlantic City to attract overnight visitors to replace some of the day trip business lost to DE, PA, MD and NY gaming; especially from our line run bus programs, that once produced over 14 million annual visitors to AC. And at the same time creating a reliable profit center in the rooms, food, beverage and convention departments, like the Las Vegas Strip; where 66% of departmental profit comes from hotel operations, less than 10% in AC. South Jersey could enjoy new visitor demand, both corporate and personal, replacing comps and discounted prices, with full rate customers. A Meadowland's slot casino would generate casino revenues north of $600 million annually, likely over a $billion, if table games were included. And at Jeff Gural's proposed 55% slot tax, the State would earn $300 to $500 million or more. This would far exceed the loss of tax revenue since 2006, as AC's casino win declined at least 50% from the $5.2 billion won in 2006. Half of the new win tax, could provide $150 million or more to the CRDA or Airport Authority to provide airline subsidies to carriers willing to fly into AC International; and the other half to restore much of the loss to NJ senior/disabled programs, Statewide. Meadowland's slots, would be much more convenient to North Jersey, Manhattan and Staten Island, and would harm Eastern PA and NY casinos, plus slots at Yonkers and Aqueduct; much more than Atlantic City. AC operators need to look more closely at the numbers, including any revenue loss from Meadowland's gaming, offset by the new overnight demand that could be created by air service from the Southern and Southwestern states, that have no gaming currently. A Meadowlands casino would also be a strong attraction, mid-week, for the convention attendees and traveling businessmen, that are staying in NY City's 100,000 hotel rooms, many only 15 minutes away by car, bus, train or helicopter, from midtown Manhattan.  NJ horse racing, also needs help. And even without games at the track, Atlantic City is not going to see casino win return to previous levels. A Casino at the Meadowlands is primarily going to be in competition with 6 casinos in eastern PA, the Catskills, plus slot machines at Yonkers and Aqueduct. The lack of Florida type weather might require AC to pair up with a second strong demand destination, like Manhattan or DC, to create a viable double vacation package; taking advantage of the lower room rates in AC midweek, with bargain prices in NY and DC on weekends. All that remains is a visitor friendly airline company, like Southwest, Airtran or Spirit, to offer service from high population cities in their service areas, that do not offer casino type gaming, currently(??) AC International, with its ongoing expansion, is a potential hub for International flights as well, as major Eastern Airports have few slots for new service; and flights into AC International, would enjoy lower airport landing and maintenance fees; plus fuel savings, from not waiting in takeoff stacks, or circling delays before landing. Plus the typical European visitor, usually staying up to two weeks, might enjoy a couple of nights of shows and casino play in an American casino resort; very different than their European model. The reason our last effort for North Jersey casinos failed, is that it did not answer several major questions, just like the failed effort in 1974. It left open, which counties or communities would be allowed a casino; and even with two active proposals, the Meadowlands and Jersey City, it did not rule out any other North Jersey counties. And just like 1974, NIMBY (Not In My Back Yard), the referendum failed. But because of the $4.4 billion cost of the proposed Jersey City casino, there was also no mention of the 55% slot tax, proposed by Jeff Gural. And with over 200,000 citizens in Jersey City, it is very possible that these residents also voted against North Jersey gaming. But the 9.800 residents, in East Rutherford, all live on higher ground, than the Meadowlands, and would not have the same issues with traffic congestion created by another major attraction; currently including the Met Life Stadium (home of the Giant and Jets football teams); the smallest community to ever host a Super Bowl. It also is home to the Meadowlands Arena, the American Dreams Mall and the site of the New Jersey Fairground. Bergen county wanted the new commerce and jobs that a casino would produce, and so should New Jersey. Atlantic City's problems, now with two new casinos, and a 30% increase in casino room and casino capacity; needs more than just online gaming, now including sports betting. It needs new markets, that are beyond the range of line run bus programs; and that means convincing an airline company to compete with their current Philadelphia service, with direct routes into AC International.