The U.S. is in another recession. The official declaration last week put its start in February.
This is especially chilling to South Jersey, which suffered a double dip into a localized depression after the severe recession of 2007-09. New Jersey’s overburdened economy was slow to recover and just as this region started to have hope, four Atlantic City casinos closed. That ended thousands of jobs and growth in the area for three more years, and made Atlantic County the national leader in bankruptcies.
Atlantic City has turned around the past three years, with two new casinos, other private investment, online and sports betting, and the state straightening out local government finances. Protecting that recovery and preventing another local downturn are crucial for the many who depend on New Jersey’s casino industry.
The Legislature took a firm step in that direction Monday when the state Senate approved letting casinos defer some taxes and fees and take a better deduction for promotional credits to gamblers.
The casinos have been shut for three months and revenue has cratered, falling by two-thirds in April and May. Gov. Phil Murphy has said he’d like to reopen them by July 4. Las Vegas casinos started reopening two weeks ago.
Finding a way to get them operational during the remainder of the coronavirus pandemic is also essential to the survival of the city’s nine casino hotels and more than 26,000 out-of-work employees. But even if that starts now, the companies need help dealing with the consequences of the state closing them for three months.
The challenge is that the state uses the tax and fee revenue from the casino industry for ongoing operations and programs. Among them are the Casino Reinvestment Development Authority and its provision of additional police and a supermarket in Atlantic City; the Division of Gaming Enforcement and the Casino Control Commission; and more than a dozen services for senior citizens and people with disabilities — including pharmaceutical assistance, vocational rehab and adult protective services. County government representatives said relief for the industry might put that revenue and the services it funds at risk.
Some senators said they’d rather try to find a way to use federal COVID relief funds to help the casino industry. But Washington politicians don’t want to be accused of bailing out gambling companies so the aid for casinos seems limited to emergency credit and liquidity, and a tax refund of half the wages for employees they kept paying after they were closed.
Senate President Stephen Sweeney, the bill’s primary sponsor, convincingly argued that the programs and services would face much greater harm if the industry isn’t helped. He said he is “committed to their support and stability” and amended the bill to reduce its impact on funding a bit before the chamber approved it.
In some ways Atlantic City casinos are in better shape than following the downturn a decade ago. But the COVID-19 recession has caused more layoffs and losses in their hospitality segment of the economy than any other. The Atlantic County metro area’s 33.3% unemployment rate in April was the second worst on the U.S. mainland — behind only Las Vegas at 33.5%.
The expedited consideration of the relief for casino companies may continue Thursday in the Assembly. Hopefully the bill soon reaches Murphy and he signs it.
The state needs urgently to do what it can to ensure the pandemic-crippled casino industry is there for the region and its many beneficiaries going forward.