Experts Cautious About Potential of NJ Casino Expansion

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Monday, February 1st, 2016 | Written by Shane Larson

In early January, Chris Christie, the Governor of New Jersey, revealed in a press conference that the Garden State was one step closer to issuing licenses for casinos to open in north New Jersey. The long battle regarding expanded casino gambling in New Jersey finally came to an end after a compromise was reached paving the way for the issue to be put to a ballot in November.

A Long-Awaited Agreement

Since 1976, Atlantic City has been the only place in New Jersey where gambling in casinos is legal. Even after online gambling legalization was introduced in 2013, the resort area along the Jersey Shore still remained the sole center for casino gambling. In favor of expanding casino gambling to North Jersey, however, are two Democratic legislators, Senate President Stephen Sweeney, and Assembly Speaker Vincent Prieto.

Both men had developed a different piece of legislation requesting voters to decide whether or not gambling should be allowed in north New Jersey. While Prieto and Sweeney have had major disagreements in the past, and have been involved in a war of words on how to move forward on the matter, Chris Christie has been pushing to get a deal done. His main concern is voter turnout; with 2016 being an election year, Christie feels that more New Jersey voters will be encouraged to take to the polls. As a result, he feels that this will provide a fuller sense of what New Jersey residents want to see happen on the casino gambling question when the casino expansion referendum takes place this year.

Why the Controversy?

So what were Sweeney and Prieto arguing over last month? While there were a few differences between the plans, the lawmakers’ primary point of difference involved who would be allowed to own casinos in North New Jersey. Sweeney’s version of the referendum question would only have allowed new casinos to be built if Atlantic City casino owners were in at least 49 percent control of the company. Being from South New Jersey, Sweeney is concerned about the impact that opening casinos would have on Atlantic City, and was interested in protecting them with his version of the agreement.

Prieto, on the other hand, believes that Atlantic City casino ownership shouldn’t be a prerequisite for owning a casino in North New Jersey. His rationale is that the state should be trying to encourage other casino operators to do business in the state.

In the end, the agreement looks most like what Sweeney proposed; however, one part of Prieto’s plan was included. In order to qualify for a license, operators will need to invest at least $1 billion in their new casinos. The idea behind this is to prevent Atlantic City casino owners from opening small gambling halls that would not really create new jobs for North New Jersey residents.

Experts Cautious About Expansion

New Jersey residents and those who follow the casino gambling industry are now all anxiously waiting to see what decision ultimately comes from Trenton in November. In the meantime, some economists and gaming experts have been warning against expanding casino gambling to the north of the state. Two of the proposed locations for new casinos to be built include Jersey City and East Rutherford, and according to Deb Figart, Economics professor at Stockton University, there is no compelling evidence to suggest that casinos in those areas would successfully attract many gamblers who might otherwise have visited gambling venues in the nearby states of New York, Connecticut and Pennsylvania.

Similarly, Sheila Reynertson, senior policy analyst for the New Jersey Policy Perspective, has cast doubt on whether expanding casino gambling in New Jersey will reap any particular employment rewards for state residents. According to some Democrats, up to 20,000 “good-paying, permanent” jobs could be created by expanded casinos, but as Reynertson explains:

“The big winners are not going to be your everyday people who need work. It’s going to be the developers, gaming manufacturers, casino owners … and that’s it. Long-term, I think it’s irresponsible for the legislators to push this as an economic driver for everyday New Jerseyans.”

Ultimately, however, it will be New Jersey residents who will decide whether expansion will go ahead. Meanwhile, Senate President Steve Sweeney has dismissed the nay-sayers, stating that “they’re going to say everything negative they possibly can about casinos.”