Risky New Jersey Casino Expansion May Make It To 2016 Ballot

Democrats in New Jersey make up the political majority of the Garden State. Some members of the party including New Jersey State Senator Paul Sarlo are pushing for a casino expansion measure to be on the 2016 ballot. The bill, if passed, would remove restrictions on which New Jersey jurisdictions casinos can be located.

Currently, casinos can only operate in the seaside town of Atlantic City. If the measure makes the ballot and passes a vote of New Jersey residents, the state’s constitution would need to be amended.

Senator Sarlo thinks that lessening regulations on where casinos can operate will counteract the loss of revenues from gaming that the New Jersey State Treasury has unfortunately grown accustomed to seeing.

In an interview with Bloomberg.com, Senator Sarlo explained why the state must eliminate restrictions on casino locations.

 “The only way we’re going to be able to compete with surrounding states and provide a meaningful amount of dollars to Atlantic City is to expand gambling to the North Jersey market.”

While talks of casino expansion increase, Atlantic City struggles

Atlantic City casinos are in trouble. In 2014 alone, four out of the twelve casinos located in Atlantic City shut their doors. With the expansion of legal gambling in surrounding states like New York and Pennsylvania, east coasters no longer need to travel to Atlantic City to gamble.

The list of closed casinos includes Showboat, Revel, Trump Plaza and The Atlantic Club. The casino closures were accompanied by roughly 8,000 lost jobs. With one third of Atlantic City’s population living in poverty, Republican Governor Chris Christie – initially against New Jersey casino expansion – has agreed that this might be the only solution to revive the state’s gaming interests. Historically New Jersey has counted on gaming as a large source of tax revenues.

With a possible amendment change to the state’s constitution incoming, many residents are worried. Some believe that expanding gambling statewide will lead to the end of Atlantic City. Although casino closures in 2014 did give a slight boost in profits to the remaining casinos, Wall Street firm Moody’s Investors Service predicts that still won’t be enough to prevent additional casinos from closing.

In an article on NJHerald.com, a Moody’s representative explained that the oversaturated market will continue to cause problems for the city:

“We expect increased competition will keep the heat on incumbents, and that [the] number of casinos in Atlantic City will likely continue to shrink. We expect more casino closures to occur in Atlantic City as some struggle to grow their business and face additional competition.”

The impact of casinos in North Jersey

Although it’s impossible to predict how many casinos may close over the next few years, the future of casinos in Atlantic City is grim. Locals in Northern New Jersey will almost certainly make fewer trips to Atlantic City if they have casinos in their backyards.

Atlantic City’s reliance on New Yorkers and Pennsylvanians is also a huge problem. The expansion of gambling in those neighboring states has taken a huge number of would-be-tourists away from Atlantic City and keeping them closer to home.

The New Jersey gaming expansion could act as a way for the state to compete for gambling dollars from surrounding areas again. This is especially so in the case of New York City where the competition for Atlantic City comes primarily from “racinos” – racetracks which can only offer gaming machines and thus don’t offer the variety of games a full-fledged casino can.

Ultimately, every North Eastern state with legal gambling will be affected if the casino expansion amendment passes. Only time will tell if New Jersey’s risk will further hurt Atlantic City or if will simply make the state more competitive in the region as a whole.

About the Author

Rudee Rossignol

Las Vegas-based Rudee writes about a variety of topics, all surrounding regulated U.S. online gambling. A longtime poker player, she offers an on-the-ground take on Internet gaming matters.