Quick Draw, the New Jersey keno-style lottery game, is quickly drawing the attention of the State Assembly for its potential impact on Atlantic City casino revenues.
According to a report from the Press of Atlantic City, a group of NJ lawmakers introduced a bill that would change how Quick Draw works. The lawmakers cite not only concerns for Atlantic City casinos, but also whether Quick Draw is unconstitutional.
NJ state pensions and Quick Draw
Quick Draw was introduced to New Jersey in the spring of 2017. Bars and restaurants began offering the game to patrons in August of that year.
To play the game, players wager between $1 and $10 per draw and choose up to 10 out of 80 total numbers. Draws happen every five minutes, and the results are displayed on monitors at participating establishments.
By some estimates, there was an anticipation that the Quick Draw game would bring in $20 million a year to help offset the lower than expected lottery revenues.
With just $5 million in revenue reported through December, it appears the Quick Draw game revenue estimates may not live up to those expectations.
Another notable piece of information is that last year former Gov. Chris Christie’s administration and the Legislature transferred the lottery to the state’s public pension fund.
The pension fund had been struggling with an unfunded liability of around $50 million, according to the administration.
Moving the lottery revenues to help offset some of that liability means Quick Draw and other games are benefitting public pensions. This is important because changes to the game can impact the fund.
Northstar New Jersey, the company that manages the marketing and sales of the lottery, fought for this type of game to help increase revenues. But the company initially was denied the approval necessary to offer video monitor games.
The denial triggered a clause in its contract allowing Northstar to lower their revenue targets, giving them an opportunity to earn bonuses on lower revenues. The revenue targets were not raised after the approval of Quick Draw, and that result obviously benefited the state.
Is Quick Draw a lottery game or casino game?
New legislation is making its way through the New Jersey Assembly, citing concerns that lawmakers were not given ample opportunity to vet the new game.
Assemblymen Vincent Mazzeo, D-Atlantic City, and Ralph Caputo, D-Essex, introduced a bill that addresses the major concern. Quick Draw, they say, is more like a casino game than a lottery game.
The bill seeks to reduce the drawings from every five minutes to twice daily, eliminating the social aspect of the game. The bill, if passed, has the potential to impact restaurants and bars that have the keno-style game, in addition to the pension.
In testimony before the Assembly Tourism, Gaming and the Arts Committee, Diane Weiss, executive director of the New Jersey Licensed Beverage Association had concerns about the impact on local establishments.
“It creates a fun atmosphere,” Weiss said. “The overall experience has been that they stay longer. They drink more. They eat more.”
Concern for Atlantic City casino revenues
Admitting that it is a “sensitive issue,” Committee Chairman Caputo, D-Essex, remains concerned that lawmakers were not given ample opportunity to research the impact of the new game on casino revenues.
“Anytime there’s a new game it could take market share away from an existing casino,” Caputo said.
Atlantic City, after all, has seen its fair share of ups and downs in recent years, as many longtime NJ casinos closed and the state had to step in. Only recently has the city seen an upturn in its fortunes. New casinos Hard Rock Atlantic City and Ocean Resort Casino plan to open this summer. So to some, it’s the frequent draws and rapid results that seem to make Quick Draw less of a lottery game and more like something found at a casino.
At the heart of the matter though is whether the game violates the New Jersey Constitution and “expands casino-style gambling outside of Atlantic City,” according to Bob Marshall of the Greater Atlantic City Chamber of Commerce.
“Whether it’s constitutional; whether it’s an expansion on gaming, I think we should be informed and we should be included,” Caputo said.
What’s next for NJ lawmakers
It’s hard to know whether a reduction of the daily draws in the Quick Draw game will impact Northstar’s existing contract or if it will once again trigger the clause allowing the renegotiation of revenue targets. Surely, lawmakers are taking a close look at the Northstar contract while it explores the constitutionality of the game.
Lawmakers will also have to weigh what seems to be an obvious reduction in projected revenue if the bill passes. How the changes will impact the budget and the public pension is only speculation this point. However, it’s an important consideration that must be factored in when the bill makes its way to the floor.