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Casino expansion unlikely despite sports betting, internet gaming success

Casino expansion unlikely despite sports betting, internet gaming success

North Jersey Casinos

The success of sports betting and internet gaming has changed the discussion on expanding casino gaming outside of Atlantic City.

The success of sports betting and internet gambling has not yet revived the idea of expanding casino gaming outside of Atlantic City.

But, neither advocates or opponents of casino expansion are discounting the idea that the positive financial results from legalized sports and internet gambling has changed the discussion.

“We know that those on the pro-expansion side are going to look for any leverage that they can find to push for North Jersey casinos,” said Bill Cortese, executive director of Trenton’s Bad Bet, a Newark-based lobbying group that fought gaming expansion leading up to the failed 2016 ballot referendum. “And, thus far, they’ve been unsuccessful.”

Internet gaming revenues surpassed the $1 billion threshold in five years’ time and the addition of legalized sports betting to New Jersey’s gaming offerings has created more than $54 million in revenue for Atlantic City casino licensees in just nine months.

Both amenities have helped Atlantic City casino revenue grow three consecutive years (2016-2018) after a decade-long decline that began in 2006. Atlantic City’s nine casinos reported total gaming revenue of $2.86 billion in 2018.

Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, said the state’s “renewed success with gaming is directly related to our ongoing commitment to the economic growth of Atlantic City.”

“Many factors have contributed to the revival of the gaming sector in Atlantic City, including the rejection of the expansion of gaming outside of Atlantic City,” said Sweeney. “Sports gaming and internet gaming provide the opportunity to gamble anywhere in New Jersey, but the benefits also help Atlantic City. That is our intention.”

Proponents of allowing casinos to exist elsewhere in New Jersey believe the timing to reintroduce a referendum to voters is wrong, specifically after its resounding defeat in 2016 when the proposal lost by a 3 to 1 margin.

“I would not want to see it back on the ballot unless we know we’re going to win,” said Jeff Gural, owner and operator of the Meadowlands Race Track in East Rutherford, Bergen County, which is the most likely location for a North Jersey casino. “Because, I think if it loses again, it will never come back.”

But the conversation and the dynamic is different in 2019.

The Atlantic City casino industry is no longer in an economic decline as it was in 2016. Four of the resort’s 12 casinos closed in 2014 and a fifth shut down a month before voters went to the polls in November 2016.

Two casino properties reopened in the summer of 2018 and the owner of the Showboat hotel said he has plans to build a new gaming hall in the future.

Internet gaming has grown exponentially, generating a monthly average of more than $30 million. Sports betting (particularly internet and mobile sports betting) has collected more than $2 billion in wagers since June.

“(Internet and sports gambling) keeps the lights on in these casinos,” said former state Sen. Ray Lesniak, who sponsored both pieces of legislation that eventually legalized internet and sports gambling in New Jersey. “The revenues that the casinos get from (those forms of gaming) enable them to upgrade their facilities, make investments in their buildings, propose other entertainment attractions. So, anybody who says that (online casino and sports betting is hurting brick-and-mortar gaming halls) is short-sighted and just doesn’t understand basic economics.”

Lesniak said the 2016 referendum was “doomed from the start” because both the Atlantic City and the casino industry were struggling and many voters did not want the same result in their communities.

“Now, because of sports betting and internet gaming, Atlantic City is coming back to life,” he said. “Casinos are re-opening, and that certainly would put a new referendum in a better light.”

However, Lesniak said he still doesn’t believe the state Legislature would entertain another casino expansion.

State Sen. Chris Brown, R-Atlantic, was a vocal opponent to expanding casino gaming outside of Atlantic City and said he would fight against any effort to revive the idea in Trenton.

“We stood up to power brokers and Trenton insiders defeating North Jersey casinos once, and no matter what bogus argument they come up with, I’m ready to fight for Atlantic County’s working families again to protect our jobs, opportunities, and the future of our children and grandchildren,” said Brown.

Gural said he thinks New Jersey’s position on a North Jersey casino will change if MGM Resorts, Las Vegas Sands Corp. and Genting get approval from New York legislators to offer full-scale casino operations in New York City.

“Once that happens, it will change the dynamic of the area, and it would be hard to argue that people who live in northern New Jersey are going to Atlantic City to gamble,” said Gural. “They would be going to New York.”

Gural estimates that a Meadowlands casino would generate $500 million annually in taxes for the state, compared to the slightly more than $200 million per year generated from Atlantic City’s nine casinos.

“I think we learned a lot from the (referendum) defeat,” he said. “I think we’re all just being patient. The Meadowlands is profitable now because of sports betting, so I can afford to sit and wait and see what they’re going to do in New York.”

Contact: 609-272-7222 Twitter @ACPressDanzis

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Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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