New Jersey voters will be asked to approve the construction of the first casinos in the state outside of Atlantic City in a referendum on the November ballot.
Both houses of the state Legislature passed the resolution allowing for the referendum to be placed on the Nov. 8 ballot. The public question does not name exactly where the casinos will be built, but the state’s Meadowland’s racetrack complex and another proposal in Jersey City are considered the leading contenders.
The referendum would specifically authorize two new casinos in separate counties at least 72 miles from Atlantic City. That restriction eliminates Monmouth Park Racetrack from contention as a casino site. Track owners had expressed interest in seeking a casino project for the Oceanport N.J. track.
The state Senate voted 34-6 and the state Assembly voted 54-15 in favor of the resolution. If voters approve the plan, it could end nearly a 40-year monopoly on casinos in the state for Atlantic City.
The plan has been controversial in the face of the same intense competition in casino gambling in the Northeast that has led to Atlantic City seeing its yearly gaming revenue halved since 2006.
Proponents of the plan say the new construction is needed to keep the state’s casinos competitive in the Northeast market and would bring in new revenue and thousands of new jobs.
“This is a very historic day for New Jersey,” said Assemblyman Ralph Caputo, a principal backer of new casino construction. “In 1976, casinos were approved for Atlantic City. It was a monopoly that existed for many, many years; many people benefited. But conditions change, and when conditions change and you don’t adapt, you become a dinosaur and you become extinct.”
The plan would also give up to $200 million annually in taxes from the new casinos for redevelopment of Atlantic City into a full resort and entertainment destination. The money allocated to the city would decrease over time.
The rest of the revenue would be split between programs and tax relief for senior citizens and the disabled. Two percent would go to New Jersey’s struggling horse racing industry and to municipalities and counties where the new casinos are located, according to NJ.com.
The referendum has been criticized since it does not spell out exactly where the casinos will be built and the tax rate they will pay. Caputo told the Press of Atlantic City that he’d like to see the legislation approving the specific casinos passed before voters go to the polls.
“It’s only fair the people understand what the impact is,” Caputo said.
The plan to build the casinos has the support of Governor Chris Christie.
“To say that somehow we could be some island unto ourselves and say, well, we’re just going to keep things in Atlantic City, not going to expand to another part of the state where there’s greater population and also greater competition now from Pennsylvania and from New York, I think New Jersey has to get into the business,” Christie told CBS News.
However, opponents of the plan—seeking to protect Atlantic City—say that the new casinos will only thrive until even more casinos are built in surrounding states, most notably New York City. The new casinos will also cannibalize Atlantic City gamblers and lead to more casino closings there, they say.
Atlantic City Mayor Don Guardian, a Republican, predicted to the Associated Press that three of the city’s eight remaining casinos will close if the new casinos are built.
“Look at my face,” Guardian said. “This is the face of failed promises from the state of New Jersey to fix my city. There will be devastation.”
The referendum also does not specify the amount of taxes the two new casinos would have to pay, but it expected to be substantially higher than the 9.5 percent Atlantic City casinos pay on their revenue.
Jeff Gural, operator of the Meadowlands Racetrack, has offered to pay a 55 percent tax on revenue at a casino he would build with Hard Rock International.
“This will provide the funds needed to rebuild Atlantic City into a first-class destination resort while at the same time provide several hundred million dollars for seniors and money to save the horse-racing industry,” Gural told the Associated Press. “It will also create thousands of construction jobs and eventually thousands of permanent casino jobs and bring dollars currently being wagered in New York and Pennsylvania back to New Jersey.”
Specifically, the ballot question reads:
“Do you approve amending the constitution to permit casino gambling in two additional counties in this state? At present, casino gambling is allowed only in Atlantic City in Atlantic County. Only one casino in each of the two counties would be permitted. Each casino is to be located in a town that is at least 72 miles from Atlantic City. The amendment would allow certain persons to apply first for a casino license.”
Casino companies presently operating in Atlantic City would have a short window to apply for the new casinos before the bidding was opened up to new investors.
Southern New Jersey lawmakers opposed to the plan promised a long and expensive campaign to try and dissuade voters from approving the referendum.
“We will take this fight to the voters of this state,” said Assemblyman Vincent Mazzeo, an Atlantic County Democrat. “It will not be quiet. It will not be cheap.”
A recent Rutgers-Eagleton poll found state voters are almost evenly split on approving or disapproving the measure, with a slight edge—49 percent to 44 percent—to those against the plan.
