New Jersey needs to review its casino rules as the threat of new competition in neighboring states remain and possibly consider limiting casino expansion in Atlantic City.
That was the message of casino operators, gaming regulators and Governor Phil Murphy’s administration to a state Senate committee calling for a comprehensive review of industry rules.
Atlantic City’s casino market has stabilized after nearly a decade of declining revenues and closed casino, but action is needed to hold off any future downturns, the officials said.
Jim Johnson, special counsel to Murphy for the Atlantic City transition, submitted testimony to the Senate State Government, Wagering, Tourism and Historic Preservation Committee.
“It is often the case in times of market failure that regulatory and oversight authorities conduct a review to see how the failure could have been avoided and propose reforms that take into account changes in the regulated industry, the testimony said. “Since the period of crisis has passed, we recommended that policy makers undertake a similar review.”
No new legislation has been proposed, but Atlantic City area politicians did respond to the testimony.
“Instead of limiting the number of casinos, we should be encouraging new investment through competition while the state focuses on enforcing the Casino Control Act to hold the existing casinos accountable to live up to their obligations to our working families by creating decent paying jobs, fostering economic re-development, and supporting programs for seniors and the disabled,” state Senator Chris Brown, R-Atlantic, in a press release. Brown is a member of the Senate committee.
However, David Rebuck, director of the state Division of Gaming Enforcement, and James Plousis, chairman of the Casino Control Commission, all testified before the committee and said the state must move to protect Atlantic City’s casino industry.
The Casino Association of New Jersey, a trade group that represents all nine of the city’s casino properties, also submitted testimony in favor of regulatory review.
Johnson recommended exploring whether to cap the number of casinos or limiting the total market capacity.
“To protect the strength of the industry, we recommended that Trenton policymakers take steps to ensure that the regulatory approach adapts to current market conditions and learns the lessons that the past may teach us,” Johnson wrote.
Casino Association officials said that while the city has made great strides in diversifying its attractions, the threat of competition still remains.
“Unfortunately, the reality is that there is still a limited and finite interest in the gaming product itself as an attraction, which limited interest was historically not sufficient to support 12 casino properties,” the group wrote according to the Press. “In fact, based on the Division’s recent financial reports, that limited interest marginally supports the market now with nine casinos.”
In another matter, Atlantic City’s State Monitor Rick Richardella and city Business Administrator Jason Holt will be leaving their positions, according to the state Department of Community Affairs.
“The city and state are excited about Atlantic City’s direction, the progress being made and what the future holds for this dynamic community,” DCA spokeswoman Lisa Ryan said in a press statement. She also said the two will be replaced soon.
“We are re-conceptualizing the business administrator position in light of the changes and opportunities in the city and believe this … will help keep the momentum going,” Ryan said.
