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North-South Jersey Casino Divide Widens Anew

Posted on August 16th, 2010

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If the lawmakers in North Jersey were to be followed, aside from having the Super Bowl hosted by East Rutherford’sMeadowlands complex in 2014, they would also want the area to house a casino. This vision is, as expected, vehemently opposed by lawmakers from South Jersey, as well as owners of gambling houses in Atlantic City, who have seen their business in bad shape for the past years. This divide between North Jersey and South Jersey politicians, primarily caused by the issue of casino placement is giving the state governor’s plans some serious delays. Governor Chris Christie has been pushing for a proposal to give Atlantic City an overhaul in order to save what is left in the state’s collapsing gaming business.

Included in the plan of the Republican governor is giving Atlantic City exclusivity to operate casinos , which has been going on for more than thirty years. Continuing this is what the legislature, which has a Democrat majority, have a bit of concern with, as interests, loyalties and different views of what will best serve Atlanic City will be in play. Among those opposed to the Christie plan is Democrat Sen. Paul Sarlo (Bergen), who has championed for a casino to be constructed in Meadowlands, which is included in his district. He stated that Christie’s plan will send the other parts of New Jersey in the doldrums if they do not receive the benefits that Atlantic City experiences. He adds that maintaining Atlantic City’s status quo as the exclusive location for casinos in the state is disadvantageous to the state’s other regions such as the Bergen and Monmouth Counties.

Christie divulged his plans last month of having the state control the tourism of gaming areas of Atlantic City. This includes having a say in casino regulations, boosting other businesses such as the convention industry, and restoring some prestige in the tarnished image of the city. This plan may also end the subsidy that the casino industry gives to the states other gaming industry – horse racing. This subsidy amounts to $30 million for 2010 and in 2011, when the subsidy expires, still stays at $7.5 million. For eight years, this subsidy has already given $176 million to Atlantic City, Monmouth, Meadowlands and Freehold racetracks. The subsidy was put in place on the condition that these racetracks do not install video lottery terminals.

Another contributor to the heat between North and South Jersey lawmakers was a letter furnished by State Sen. Raymond Lesniak (D., Union). It was addressed to real estate and casino mogul Donald Trump, requesting him to spearhead the building of the casino in Meadowlands. Lesniak proposed that a portion of the profits of the Meadowlands casino will be funneled to Atlantic City to fund its revitalization programs. Lesniak quoted this annual subsidy to be at $600 million at first and $100 after. Trump did not accept Lesniak’s invitation, as he claims that having a casino in the Meadowlands would be detrimental to Atlantic City, where he owns casinos as well. Trump’s entertainment reports company, has just been cleared from a third bankruptcy and has New York hedge funds as its majority owners.

A resort casino in Meadowlands, which is currently already the home of the sports teams New York Giants and Jets, a racetrack, plus a retail mall worth $2 billion would be direct completion for facilities in the Shore, as well as casinos currently being built in Pennsylvania. Aside from Trump, Harrah’s another casino industry major player, also has 4 Atlantic City casinos and has plans to acquire a site in Philadelphia’s waterfront to construct a new casino. These would be affected if a Meadowlands casino pushes through. In looking at Atlantic City’s clientele, close to 64 percent comes from New York and the rest of the state, and 21 percent is from Pennsylvania.
Meanwhile, the four facilities of Harrah’s on the Shore gives employment to 14,000 people and is 40 percent of the company’s entire gambling income yearly. A study by an economist of Rutgers University states that the industry of gambling in Atlantic City gives employment to 38,000 people and gives them $1.8 billion worth if salaries. $7.5 billion is being contributed by the industry to the state economy.