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Friday, July 04, 2014

Tide is Turned on Atlantic City Casinos

The prospect of a casino at the Meadowlands has gotten a big boost with the sudden support for the idea by the New Jersey Senate President Stephen Sweeney.

Sweeney’s at odds with the South Jersey Democrat’s public statements in which he has adamantly defended a five-year moratorium, until early 2016, on any discussion of casino gambling in the state beyond Atlantic City. The motivation for that ban, developed in partnership with Governor Christie, was to give the struggling seaside resort a chance to get back on its feet.

But on Wednesday, Sweeney said there is a “very real possibility” that a statewide proposal on expanded gaming could be placed on the November 2015 ballot. [The Record]
This however does not mean that Sweeney and Christie are abandoning the beleaguered gaming city on the Jersey shore.  The idea is that a portion of the revenues would be earmarked for Atlantic City.
Former Atlantic City casino executive Steve Norton, with roots in the industry dating back to the dawn of gaming there in 1978, estimated that the state could collect $300 million to $350 million annually in taxes from a Meadowlands casino. Norton said that if half of that money went toward trying to revive Atlantic City, “it could turn the tide” of declining visitors.
Well, indeed, talk about turning the tide!  It used to be that Atlantic City casinos subsidized the purses at the Meadowlands until Christie put a halt to that when he wasn't busy illegally diverting Port Authority money to subsidize unrelated work on the Pulaski Skyway.  Now we're talking about the Meadowlands - albeit gaming other than horse racing - subsidizing Atlantic City.  The casinos there fought that purse subsidy tooth and nail, and now they're on the other side, how does that feel?

But, really?  Exactly how is such an influx of money going to save the struggling casino business there?  Are they going to build waterparks, dinosaur theaters, and scenic ponds?  Seems to me that the only answer to Atlantic City's woes would be to put all of the existing and future casinos and slots parlors in Pennsylvania and Delaware and New York out of business.  As if it is not already being hurt enough by all the existing competition in the area, a second casino in Philadelphia remains a possibility (Penn National withdrew their bid this week, citing the "ongoing gaming saturation in the mid-Atlantic region.")  And any casinos sited anywhere in the Catskills/Orange County region would be within easy reach of millions of New Jersey residents. 

Speaking of that gaming saturation in the mid-Atlantic region, slot machine revenue in Pennsylvania dropped 6% in June as compared to last year.
Overall gross slot machine revenue for the fiscal year has slipped 4.5 percent, according to figures released today by the Pennsylvania Gaming Control Board. [Philly .com]
 - This is the press release from Empire Resorts regarding the submission of their application to build, in partnership with EPR Properties, a $1 billion casino facility at the old Concord site.  However, as we mentioned the other day, that sum depends on where the other Region One casino ends up going.  As in, not in Orange County.  In the company's own words:
The size of the project, including the amount of capital necessary to complete it, will vary based upon the number and location of competitive licenses issued by New York State in our region.
The casino itself would be called the Montreign Resort Casino; and the entire site, including all the non-casino goodies, will be referred to as Adelaar.  The release also notes that this project already has SEQRA (State Environmental Quality Review Act) approval (which the East Greenbush project, for one, does not), "making this application a front runner that can rapidly deliver the jobs and economic opportunity the Town of Thompson and Sullivan County so richly deserve."

 - The Times Herald-Record reports of a "private, marathon session" between the Town of Woodbury and Caesars Entertainment (which is closing its Showboat casino in Atlantic City) that lead to a 23 page "Host Community Benefits Agreement" [pdf] with respect to the company's proposed casino in that Orange County town. The town board approved it on June 25, leading to a support resolution which passed 5-0 and allowed Caesars to submit its application five days later.   
Included are initial estimates by town officials of almost $1 million for police cars, a court renovation and other capital costs, and about $3 million a year for more police officers and other personnel. The annual expenses would rise by 3 percent each year.

Caesars has agreed to abide by whatever cost determinations the Planning Board makes. Town officials, on the other hand, are entitled to appeal those decisions through arbitration if they disagree.

Caesars, one of eight applicants competing for a casino license in Orange, Ulster and Sullivan counties, also has promised to give the Town of Woodbury $1 million a year for four years, to be spent however the town chooses to alleviate negative effects or for "the betterment" of the community. [Times Herald-Record, limited free access]
The town also scored hiring preferences and ongoing job training for its residents, a pledge to annually source $5 million worth of goods and services from local businesses (including snow removal, florists, and caterers), mitigate traffic problems, construct two all-weather playing fields, build a tree buffer between the casino and local residences (consistent with the requirements of SEQRA, not yet finalized for this project), and a commitment to promote "responsible gaming" (ha ha).  The latter includes keeping billboards at least 500 feet from schools (that's all?) and "airing the casino industry's first broadcast advertising campaign to promote responsible gaming to increase awareness of toll-free helpline numbers." 

So, this town seems to have done pretty well for themselves, both in getting money and, with the responsible gaming nonsense, trying to relieve some of their guilt as they're counting their money while residents become addicted gamblers.  It's an interesting look at just what kind of inducements these companies were willing to offer - and what the towns are able to extract/demand - in return for the local support resolution, required by the Gaming Commission, as the June 30 application deadline quickly approached.  I'd guess that other host agreements have similar goodies for the cities and towns.  In fact, if other companies have also pledged to air "the casino industry's first broadcast advertising campaign to promote responsible gaming" (the reason there haven't been any is probably because there is nothing responsible about casino gambling), it could prompt quite a frenzied race to the airwaves!

1 Comment:

Anonymous said...

I live in the town of woodbury in orange county new york and I read your comments with interest.I am one of the people opposed to the casinos because if something seems too good to be true it usually is and if you are familiar with our traffic situation with 13 million visitors coming up to the Woodbury Common adding another 10 million visitors is absolutely ridiculous thank you for keeping an eye on this and I will be reading more