New Jersey lawmakers last week agreed on the sketchy details a referendum to put before voters in November 2016 that would allow for the construction of two casinos outside Atlantic City.
The proposed referendum will not specifically state locations for the two casinos, but North Jersey sites such as the Meadowlands and Jersey City have been heavily discussed as potential sites. The bill will also not specifically designate a tax rate, nor the formula to reimburse Atlantic City for the loss of casino revenues certain to hit the city’s remaining eight casinos.
If passed, the developers would then submit their projects for consideration.
Senate President Stephen Sweeney said the time has come to consider the expansion of gaming outside Atlantic City.
“The question of gaming outside of Atlantic City has long been debated,” Sweeney said. “Now is the time for the voters to decide. Expanding gambling to north Jersey is the best way to revitalize an industry that is important to the state’s economy so that we can compete with neighboring states, generate the revenue needed to revive Atlantic City and contribute to economic growth.”
A referendum is needed because the state’s constitution currently only allows casinos in Atlantic City. Southern New Jersey officials have bitterly opposed the proposal and pledged to fight against the move.
Assemblyman Vince Mazzeo called the move “another punch in the gut to Atlantic City’s road to recovery. To think that the answer to an already overly saturated gaming market is saturating it even more is madness.”
NJ.com quoted several Bergen County politicians—the Meadowlands is in Bergen County—saying that allowing new casinos will help the state to stop losing ground to casinos in other states. Officials have also said that any proposal must direct some funds to help redevelop Atlantic City.
“If we use the strategy of not pitting North Jersey against Atlantic City and present what we are doing as an economic engine for the entire state, I think that the facts will speak for themselves and it will help motivate residents to vote in favor of it,” Assemblywoman Valerie Vainieri Huttle told the website. “If we start talking about where the money could be invested—if it is going to be invested in human services or in our seniors or in transportation—I think the voters would be more inclined to support something like that.”
The two sites most often discussed are the Meadowlands, home to a harness racetrack as well as the football stadium that houses both the New York Giants and Jets. Hard Rock International has reached an agreement with Jeff Gural, the owner of the racetrack, to build a $1 billion facility. Jersey City is also in the running where former Rebook owner Paul Fireman wants to build a casino resort that would cost almost $5 billion.
The key to the bill is a higher tax rate than Atlantic City, where casinos pay 9.25 percent of their gross gaming revenues to the state. Gural has offered to pay a 55 percent tax rate. The bill would set up a New Jersey Investment Fund, and for the first 15 years, send 49 percent of the revenue to Atlantic City to compensate for expected losses, another 40 percent to counties and municipalities for tax relief for seniors and the disabled; and 2 percent to the horse racing industry. For the next 10 years, the measure going to Atlantic City would decrease by 3 percent a year and the amount going to counties and municipalities would increase by the same amount. Finally, Atlantic City would get 19 percent of the new tax revenue each year, while counties and municipalities would get 79 percent.
