How much will Atlantic City get if North Jersey Casinos become a fact-of-life? A resolution will be introduced on Thursday to show how revenue from North Jersey casinos will be distributed if NJ voters OK the expansion of gaming. Assemblyman Caputo; who’s pushing the resolution says: a casino at Meadowlands Racetrack, if voters approve, might get taxed at 40 percent.
What does casino industry consultant Steve Norton think? Read on….
This is great news for North Jersey gaming, but even with new legislation, if it isn’t specific enough; the referendum will fail. Assemblyman Caputo and Senator Whelan are on point. Atlantic City, seniors and the disabled need to know what they can reasonably expect from North Jersey gaming.
Why not establish the Pennsylvania tax rates for developers (spending at least a $1 billion), as they are the primary competition facing a North Jersey casino? Then, determine how much is going to seniors and the disabled; that have lost $1.8 billion, since PA approved slots in greater Philadelphia. Then, tell Atlantic City what their share is for giving up a monopoly, effectively lost in 2006.
The other critical component for a successful referendum: severely limit possible locations; preferably just the two that have developed plans: the Meadowlands and Jersey City. This would prevent NIMBY (Not In My Back Yard) from prompting a no vote from voters in communities, that would still be in play. That was the primary reason the referendum failed in 1974 (60% to 40%); where every county could have a casino. The beauty of this plan, is the Meadowlands could be operational, within a year; probably 4 to 5 years before NY could act (and build a casino) in Manhattan.
The PA casino tax ( 55% on slot and 16% on table win ), could apply to the more expensive Jersey City casino, by giving credits against the win tax, for amounts spent above $1 billion.
I recently prepared a study of county populations in Eastern PA, New Jersey, NY City and the NY Counties of Orange, West Chester, Nassau and Suffolk. With population support, of over 6 million, similar to Aqueduct; but with table games, a large showroom,multiple restaurants and lounges, and better access to Manhattans (by car, bus, limo and rail); a Meadowlands casino could easily surpass the $800 million expected this year just from Aqueduct slots. And being only 15 minutes from Manhattan, means the millions of tourists, traveling businessmen and convention/trade show attendees, can easily spend a night at an entertainment facility not currently offered in the City.
Those concerned citizens of South Jersey, have to realize that the Atlantic City business model has to trend toward that of the Strip in Las Vegas; where casino revenue is less than 35%, while AC’s is still 70%. The big difference is the larger Strip resorts are making 73% of their operating earnings from the once forgotten departments…. rooms, food, beverage, convention, entertainment and retail.
Steve Norton.
About Steve Norton….
- Norton Management LLC Chairman/CEO · Consulting with casino gaming industry since 1998.
- Argosy Gaming Co. President/COO · 1993 to 1998 · Operated riverboat casinos in 5 states.
- Gold River Resort and Casino. President / CEO · 1991 to 93 · Laughlin, Nevada
- Las Vegas Sands. President/COO · 1990 to 91. Operations of Sands Hotel/ Casino, Sands Expo Center.
- Resorts International, Executive Vice President · 1967 to 90 · North Miami, Florida. The company owned Paradise Island, Bahamas; and the Resorts International Casino Hotel in Atlantic City. Started initially as VP/Treasurer/Comptroller of Paradise Island Ltd