New Jersey Residents Will Vote On North Jersey Casino Expansion In November

Written By Steve Ruddock on March 15, 2016

[toc]A referendum that could bring casinos to North Jersey will be on the November ballot after both the New Jersey State Senate and Assembly easily passed the proposal to end Atlantic City’s monopoly on casino gaming in the Garden State.

The Assembly passed the measure by a vote of 54- 16 on Monday (48 votes were needed as the bill required a 60 percent majority to land on the November ballot), shortly after the Senate overwhelmingly approved the measure by a vote of 34-6 earlier in the day.

Inside the referendum bill

In a nutshell, the bill that will go before the voters in November would allow up to two casinos to be built in North Jersey, with preferential treatment given to current operators in Atlantic City, and the caveat that they invest at least $1 billion in each of the projects.

More on the North Jersey bill can be found here.

It’s far from a certainty that both, or even one of the North Jersey casinos would be owned and operated by current operators in Atlantic City. We guessed at some of the potential suitors for the North Jersey casino licenses here.

All that being said, the driving force behind the bill is the money these new casinos will send to Atlantic City.

A significant chunk of the tax revenue generated by the state would be reallocated to Atlantic City, as under the proposal, Atlantic City would receive 50 percent of the first $150 million in tax revenue generated by the new casinos beginning in the second year. Atlantic City’s share of the tax revenue falls by 10 percent for every $150 million in additional revenue, down to floor of 20 percent.

Will it pass?

Getting the measure on the ballot was difficult in and of itself (and took multiple years), but now proponents of North Jersey casinos will have to work double time to convince New Jersey residents it’s a good idea to pass the measure.

Polling done last summer showed 56 percent of New Jersey residents were opposed to casino expansion outside of Atlantic City, while just 37 percent supported such a plan.

However, even though Atlantic City has been declining for several years, the polling was done before the proverbial rubber hit the road – before full-fledged bankruptcy not only became a possibility, it became almost unavoidable.

Furthermore, the polling was for an abstract idea. Now that North Jersey casino expansion will be on the November ballot, voters will likely educate themselves on the topic, and the opponents and proponents will undoubtedly try to help them, as they make arguments for and against casino expansion and its potential Atlantic City lifeline.

Atlantic City in crisis

To say the situation in Atlantic City has reached a tipping point is an understatement. And even though it won’t provide immediate assistance (it would be several years before a North Jersey casino opened its doors) the knowledge that casinos will open their doors in North Jersey – and that part of that revenue would go to Atlantic City revitalization efforts –  would almost certainly make some lawmakers, and New Jersey residents, more comfortable with the idea of throwing the city a short-term lifeline.

The city is trying to stave off full-blown bankruptcy, which is becoming harder and harder as the legislature quibbles over aid bills, and the governor vetoes them. There is also the not-so-small matter of a massive tax refund the city owes Borgata but is unable to pay.

As I noted in a column earlier this month about a boutique casino proposal, the legislature appears to be throwing everything but the kitchen sink at Atlantic City to try to put off what now appears inevitable.

Unfortunately, there is no clear consensus in the legislature. As Max Pizarro has reported for PolitickerNJ.com, the debate over how to assist Atlantic City has reached a “conflagration point” this week, nearly coming to blows between two prominent members of the New Jersey Legislature during a discussion about a proposed state takeover of the cash-strapped city.

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Steve Ruddock

Steve covers nearly every angle of online poker in his job as a full-time freelance poker writer. His primary focus is the developing legal and legislative picture for regulated US online poker and gambling.

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