Agreement Reached in Northern New Jersey Casino Expansion Plan
TRENTON - (Associated Press) - New Jersey lawmakers have reached a deal to put a statewide referendum on the November ballot asking voters whether to approve two new casinos in the northern part of the state.
Republican Gov. Chris Christie joined with Senate President Steve Sweeney and Assembly Speaker Vincent Prieto on Monday to announce a deal that would impose a minimum of $1 billion in investment in each of the two new casinos.
The new bill would give existing Atlantic City casino operators six months to propose projects in northern New Jersey that would cost at least $1 billion. If they fail to do so, then both new licenses would be thrown open to any interested company.
It also would resolve a bitter public feud among the Democratic leadership of the state Legislature, in which Sweeney and Prieto refused to adopt the other’s bill.
“We want real investment in north Jersey; we don’t want slots in a box,” Sweeney said.
Prieto dropped his insistence that at least one of the two licenses be open to casino companies currently not doing business in New Jersey.
“I don’t care who builds them as long as they get built in the right fashion,” he said.
The competing bills differed on who could own the new casinos, and how much of the gambling tax revenue they generate would go to compensate Atlantic City for the expected loss of business to new in-state competition. The Assembly bill would have only required one of the two new casinos to be owned by an existing Atlantic City operator; the Senate bill required that both be owned by Atlantic City operators, although they could grant partners a stake of up to 49 percent.
The state Senate passed its bill, championed by Sweeney, on Monday; the Assembly will add the investment language to its bill, which could be introduced as soon as Tuesday, Sweeney said. The compromise will need to be approved by a three-fifths majority in the next session, which begins Tuesday.
Sweeney has estimated $200 million a year would go to help redevelop Atlantic City. Most of the remaining revenue — after payments to the state’s horse racing industry and to communities that host the casinos — would go to programs and tax relief for senior citizens and the disabled statewide.
Sen. Paul Sarlo, a Bergen County Democrat, said the two new casinos could generate $4 billion to $5 billion in private investment in north Jersey, and an additional $3 billion of economic activity in Atlantic City.
“At the end of the day this could be an $8 billion investment in our economy,” he said. “This is a win for New Jersey — not for Atlantic City, not for north Jersey, but for New Jersey as a whole.”
Sen. James Whelan, an Atlantic County Democrat and former Atlantic City mayor, said the north Jersey casinos will soon be overshadowed by new casinos envisioned for New York City.
“What happens to North Jersey casinos when New York City inevitably gets one?” he asked. “It is foolish to think that gaming in North Jersey would do anything but cannibalize an already saturated market in the same way that casinos in Pennsylvania, Delaware, and Maryland have cannibalized ours.”
Sen. Gerald Cardinale, a Bergen County Republican, said Atlantic City squandered a tremendous opportunity when it was the only game in town, and cautioned against giving too much new tax revenue to it.
“These are the folks who have failed to capitalize on a monopoly,” he said. “We’re going to take a revenue stream and give it to a place that has failed to do good things with the money it has gotten. We should not be rewarding failure.”
Key details remain to be worked out in enabling legislation that has not yet been crafted, including where the new casinos would go (the leading candidates are Jersey City and the Meadowlands sports complex in East Rutherford) and what tax rate the new casinos would pay. Atlantic City’s casinos pay 8 percent, but one proposal for a casino at the Meadowlands would pay as much as 55 percent in taxes.
Sweeney said he does not want it to be so high that it would discourage substantial investment in the projects.
“The higher the tax is, the less you get done there,” he said.