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Bill Allowing Smaller Casinos In Atlantic City Passes Senate Committee

Posted on May 16th, 2010

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A bill sponsored by Sen. Jim Whelan, D-Atlantic, that is deemed to save Atlantic City’s gambling industry from sinking, unanimously passed a Senate Committee Thursday and will now move forward to the full state Senate for another round of discussion and voting. The proposal would allow the licensing of four boutique casino hotels which would be much smaller than the 11 existing casinos in the city and would require them to be positioned down the Boardwalk. The bill would permit the new facilities to have smaller casino floor space and to build at least 200 hotel rooms as opposed to the regular minimum state requirement of 500 rooms.

Executives and officials of existing casinos that have objected to the proposal showed up at this week’s committee hearing. Joe Corbo, head of the New Jersey Casino Association, asked the senators to delay the processing of the bill until a gaming advisory committee has submitted to Gov. Chris Christie its report on the effects the new casinos would have on the city’s gambling industry and on the city’s populace and its recommendations on how to improve the state revenue’s downward trend.

Corbo said the bill would significantly and irreversibly alter the rules of licensing. He said the standard size requirement for gaming facilities that existed for 30 years must be maintained in order for Atlantic City to continue its image as a destination and convention centre. He said the setting up of smaller casinos would permanently turn the city into a mere gambling place for transients. Corbo stressed the city’s failure to come up with measures and strategies that would draw more conventions to the city. The bill imposes a 14 percent tax rate on the new, smaller casinos, higher than the 9 percent paid by the currently existing larger ones, because of the lesser expenses that would be entailed in building the smaller facilities.

Under the measure, existing hotels can apply for gaming licenses that would allow them to add in a gaming floor or to offer some of their space to an existing casino in a joint venture. Lately, the economic recession has been showing signs of easing up, giving some hope to the city’s gambling industry which had been devastated by continuous double digit drops in revenue since the onset of the recession in 2008.