A New Jersey state senator is pushing for land-based gambling expansion outside of Atlantic City as the prospect of New York City-area casinos draws nearer.
Sen. Joseph Pennacchio, R-Morris, says it is time for NJ to put slot machines at racetracks around the state, including at the Meadowlands, Monmouth Park and Freehold Raceway. The slot machine revenue would be taxed 50% under the proposed legislation, comparable to NY’s tax rate on its racinos (55%).
Pennacchio, a longtime North Jersey lawmaker, says the change will help Atlantic City casinos — who will operate the slot machines — and keep more gambling money in the state.
“We are leaving untapped money on the table,” he said in a prepared statement.
PlayNJ wrote about Pennachhio’s idea last month when the bill was reintroduced. But the lawmaker doubled down on Tuesday, putting out a news release urging support for the cause.
Here’s how Atlantic City casinos could benefit from racetrack slot machines
According to the proposal’s text, SCR14 dedicates most of the tax revenue — 60% — to the state’s chronically underfunded public employee pension account. Of the remaining taxes, 30% would go to a consortium of AC casinos, with market size determining operator payouts. Just 7% would go to Atlantic City programs and 3% to the horse racing industry.
A constitutional amendment is required since the senator’s proposal would change the state’s gambling laws. Amendments to the state constitution must be approved via a ballot question.
Pennacchio’s proposal comes at a precarious time for Atlantic City’s nine casinos, with two-thirds failing to match pre-pandemic (2019) revenue performance levels in 2023.
NJ online casinos nearly generated as much annual revenue as AC casinos last year, and sports betting in NJ has all but eliminated the need for brick-and-mortar sportsbooks.
Hard to imagine AC casinos supporting in-state competition with NY casinos on the horizon
But the biggest threat to AC casinos is the Big Apple.
NYC is about to have real casino gambling. NY officials are in the process of issuing three class III gaming licenses within a designated downstate area that includes all five boroughs, Long Island and three surrounding counties.
Pennacchio says NJ needs to put itself in a more competitive position. He has been advocating this legislation for nearly a decade.
“Why does New Jersey continue to sit on the side lines and have New York take advantage of a lucrative market which we should also be engaged in? A racino at the Meadowlands alone would be a game changer for New Jersey taxpayers,” Pennacchio concluded.
Atlantic City casinos have historically opposed any land-based gambling expansion outside the city limits. NJ voters overwhelmingly rejected a ballot referendum to permit casinos in North Jersey in 2016. The “Vote No” campaign was heavily funded by AC casino operators, including businessman Morris Bailey, owner of AC’s first casino, Resorts Casino Hotel.
