New Jersey voters are seen as likely to reject a public referendum allowing for two casinos to be built in northern New Jersey—the first in the state outside of Atlantic City—so proponents of expanding gambling in the state are already looking for alternative plans.
One proponent of expansion, state Assemblymen Ralph Caputo, has revived plans to allow video lottery terminals at the state’s racetracks. Since VLTs are different than actual slots, and would be run through the state’s lottery, Caputo feels they can be placed at tracks without the need for a new referendum.
Caputo, a former Atlantic City casino executive, told the Associated Press he will amend two bills he introduced earlier this year to authorize video lottery terminals at state racetracks including the Meadowlands in East Rutherford and Monmouth Park in Oceanport.
However, plans to use the VLTs—which operate like slot machines—have been proposed in the state before with little success. Caputo last proposed VLTs for tracks in 2010,
The two bills Caputo introduced in January would require voters to approve the change through a statewide referendum. But Caputo said he would amend the bills to remove a requirement for a new referendum.
“This is a way to get back into the game,” Caputo said.
Caputo is banking on a 1982 opinion by then-state Attorney General Irwin Kimmelman who advised that video lottery terminals would not require an amendment to the state Constitution, which currently limits casino gambling to Atlantic City. Caputo’s measure would also seek to overturn a rule signed in 1983 by then Governor Tom Kean that barred the state lottery from using such machines, according to the AP.
However, the state’s struggling horseracing industry has long sought to add slots to compete with racinos in neighboring states.
Under Caputo’s plan, proceeds from the machines would be used to pay prizes to winners; cover the state’s expenses in administering the machines, and provide 18 percent of revenues to a fund for the horse racing industry, to be administered by the New Jersey Racing Commission, according to the AP.
The machines would be authorized by the lottery but then overseen by state gambling regulators, Caputo said.
In 2003, a move to add racetracks slots in the state ended with a deal that had Atlantic City casinos pay $30 million a year to the horse racing industry in return for keeping slot machines out. In 2011, new Jersey Governor Chris Christie ended those payments, redirecting the money to fund promotional efforts for Atlantic City.
Meanwhile, the referendum to allow the new casino construction seems headed for defeat after record spending by groups both opposed to the plan and in favor of the referendum.
Nearly $21 million had been spent on advertising for as of last week. That included $12.5 million from opponents connected with Atlantic City and New York casinos interested in blocking any regional competition and $8.5 million from developers wanting to build casinos in Jersey City and the Meadowlands.
Jeff Gural, owner of the Meadowlands Racetrack, expressed some of the frustration pro-casino forces are feeling at a recent Bayonne Chamber of Commerce event. Gural has entered into a partnership with Hard Rock International and proposed building a major casino project at the track. Though the referendum does not lay out where the new casinos would be built, the Meadowlands project is considered a likely choice.
Gural called the Atlantic City casino owners—who have opposed the plan—“greedy pigs” and criticized them for building competing casinos in other states while paying very low casino taxes in New Jersey.
“What you have is that the casino industry in Atlantic City, basically takes the money that they make in Atlantic City and build casinos to compete with Atlantic City,” Gural said according to a report in the Hudson County View.
Though the referendum does not set a tax rate for the new casinos, Gural has said he’d be willing to pay as much as 50 percent of revenue at a Meadowlands casino. Atlantic City casinos pay about 9.2 percent, which is substantially lower than rates in surrounding states.
Gural and Paul Fireman—who has proposed a major casino project in Jersey City—were funding advertising in support of the referendum, but pulled that advertising last month after polling showed the referendum has little chance of passing.
Also, supporters of the expansion said at a recent forum in support of the referendum, that even though it will likely be defeated, they have to continue to fight to keep the final vote close. Proponents could try to re-introduce another referendum in two years, but an overwhelming loss would make that difficult.
