NJ plans vote on expanding casinos
New Jersey voters would be asked in November whether to approve two new casinos in the northern part of the state under an agreement unveiled Friday by state lawmakers.
The deal announced by Senate President Steve Sweeney calls for a November 2016 referendum on whether to approve two new casinos in separate northern New Jersey counties. The ballot question would not specify locations for either casino.
Tax revenue from the new casinos would go to help Atlantic City compensate from the expected loss of business; to each county and municipality for tax relief for senior citizens and the disabled; and to the state's struggling horse racing industry. It does not specify the tax rate the new casinos would pay.
If voters agree to amend the state constitution to permit casinos beyond Atlantic City, it would mark the biggest change in legalized gambling since casinos began operating in the seaside resort in 1978.
It also would create an existential challenge to Atlantic City's eight casinos at the same time providing them a lifeline of new revenue from hefty taxes the new casinos would pay.
"The question of gaming outside of Atlantic City has long been debated," Sweeney said. "Now is the time for the voters to decide. Expanding gambling to north Jersey is the best way to revitalize an industry that is important to the state's economy so that we can compete with neighboring states, generate the revenue needed to revive Atlantic City and contribute to economic growth."
Assembly Speaker Vincent Prieto said the Assembly has not signed off on the proposal, calling it an "ongoing discussion."
Southern New Jersey politicians quickly voiced opposition. Assemblyman Vince Mazzeo called the move "another punch in the gut to Atlantic City's road to recovery."
"To think that the answer to an already overly saturated gaming market is saturating it even more is madness," he said.
The most commonly mentioned location for a northern New Jersey casino is at the Meadowlands Racetrack in East Rutherford, just outside New York City. Hard Rock International and the Meadowlands Racetrack unveiled plans in June for a $1 billion casino at the sports complex, next to the stadium where the NFL's New York Jets and Giants play.
Another leading proposal is for Jersey City, where footwear magnate Paul Fireman has proposed a casino costing as much as $5 billion.
A requirement in the bill that the new casinos be located at least 75 miles from Atlantic City would appear to knock Oceanport out of the running, where officials wanted to offer casino gambling at the Monmouth Park Racetrack.
The move comes as Atlantic City's casino market continues to shrink, beset by ever-increasing competition in the already-saturated Northeast gambling market. Last year, four of the city's 12 casinos closed.
Gov. Chris Christie, a Republican presidential candidate, agreed to give Atlantic City five years to turn around its sagging fortunes before considering expanding casinos to other parts of the state. That deadline expires in two months.
A key element of expanding casinos to northern New Jersey is having them pay a much higher tax rate than the 8 percent the Atlantic City casinos pay. Hard Rock has offered to pay a 55 percent tax.
The proposal would send all tax revenue from the new casinos into a New Jersey Investment Fund. For the first 15 years, 49 percent of the money would go to Atlantic City to compensate for their expected losses; 49 percent to counties and municipalities for tax relief for seniors and the disabled; and 2 percent to the horse racing industry.
For the 10 years that follow, the amount sent to Atlantic City would decrease by 3 percent a year and the amount sent to counties and municipalities would increase by 3 percent a year. After that, Atlantic City would get 19 percent of the new tax revenue a year, while counties and towns would get 79 percent.