New Jersey is once again considering expanding casino gambling beyond the borders of Atlantic City, and with an agreement in place between the senate and the assembly, it looks like a constitutional amendment that would allow two North Jersey casinos could land on the November ballot.
The bill, largely based off of Senate President Steve Sweeney’s original proposal, still needs to pass the New Jersey Assembly and the New Jersey State Senate by a three-fifths margin sometime in the next five to six months to make the November ballot.
Assuming the legislature passes the bill, the next step would be a statewide referendum in November, which if passed, would green light the licensure of two casinos in northern New Jersey.
One of the interesting aspects of Sweeney’s bill is the preferential treatment it gives current Atlantic City casino operators. However, if the current operators decide to pass on building a billion-dollar casino (a late amendment added by Assembly Speaker Vincent Prieto) just a stone’s throw from New York City, or if they don’t have all of their ducks in a row by the predetermined deadline, they will lose their preferential treatment, and any company can bid on the North Jersey casino projects.
Contenders from the current crop of Atlantic City casinos
Of the current casino operators in Atlantic City, not very many seem capable of taking on such a daunting project.
MGM the most likely candidate
MGM, which is a 50 percent owner of Borgata along with Boyd Gaming, would be the most obvious candidate.
Borgata is far and away the most successful casino in Atlantic City, and linking it with a second casino in North Jersey would cement its place at the top of the New Jersey gaming industry.
In April of 2015, MGM CEO Jim Murren spoke about a North Jersey casino, stating, “The market opportunity up north is vast. If that were to pass, MGM would be interested in pursuing it.”
According to State Senator Jim Whelan, a former Atlantic City mayor, the bill amounts to a hand-out for MGM and Caesars.
“This is wired for MGM and Caesars; that’s where this is going. MGM hasn’t invested a hard nickel in Atlantic City of construction or operation — ever. They never have,” Whelan said while discussing the bill during a committee hearing.
Caesars’ house would need to be in order
Whelan may be on the right track with MGM, but Caesars seems unlikely to be a real contender for a North Jersey license, unless something radically changes in the coming months.
Point being, can Caesars possibly build a billion dollar casino when it’s going through restructuring in order to avoid an all-out bankruptcy? It just seems highly unlikely that the company would be able to take on more debt (especially of this magnitude) given its current financials.
Looking at the other Atlantic City casinos, there only appears to be a single good candidate that would be willing to take on the task of building a billion dollar destination casino in North Jersey.
That one possibility is Mohegan Sun, which is in the midst of turning around Resorts Casino in Atlantic City. Mohegan lost out on a Massachusetts license to Wynn in September of 2014 (which would have been a billion dollar project), so the company may now be looking for alternative sites such as North Jersey.
The other Atlantic City possibilities are extreme long shots.
Trump Taj Mahal is dealing with its own bankruptcy restructuring which rules it out. And billion dollar resort casinos don’t jive with Tropicana Entertainment’s and Landry’s (which owns the Golden Nugget) business plans.
Out of state possibilities
If the current crop of casino operators in Atlantic City don’t snap up the two North Jersey casino licenses, I expect some pretty big names to be waiting with bated breath for the chance to build in North Jersey.
After locking up the highly coveted Boston-area casino in Massachusetts, Steve Wynn is now being floated as a potential contender for a North Jersey license.
According to Assembly Speaker Vincent Prieto, he has “talked to many individuals that have expressed interest in coming into New Jersey. Mr. Wynn is one of those individuals that has shown interest in different sites in the area.”
During his keynote speech at Global Gaming Expo 2014, Sheldon Adelson was extremely interested in North Jersey, now that the area doesn’t smell like a “pig farm” anymore (his words, not mine).
Adelson was enamored with the idea of having a destination resort casino so close to New York City and several international airports, as it presents him with the chance to build an “iconic” casino.
Hard Rock continues to be a contender, particularly if we read between the lines of its recent hire, Kresmir Spajic, who will head up the company’s online gaming division. Spajic is heading to Hard Rock from Rush Street Gaming, which is another casino corporation that might have some interest in North Jersey.