2014: Chris Christie's High Hopes for New Jersey
New Jersey's gambling scene seems to be an ever-changing whirlwind of drama. Last November, online gaming became legal. This January, the Atlantic Club Casino Hotel will close. Revel Casino faces a possible second bankruptcy in the coming months. Over the course of the next year, Governor Chris Christie has made his expectation clear: Atlantic City needs to pick up its game and start making more profits, or other alternatives will have to be considered.
Christie has always looked at gambling as a moneymaker for his state, pushing the envelope to allow legalized online gaming and the expansion of sports betting. If Atlantic City doesn't bring about the “significant results” he's hoping for in 2014, the governor has suggested that gambling be permitted in other areas of the state, including the horse racing Mecca called the Meadowlands in East Rutherford. As of right now, the only place in New Jersey where casinos can operate legally is Atlantic City.
The gaming town, sometimes referred to as "America's favorite playground," has attracted tourists and generated millions of dollars in jobs and gaming revenue for years. Residents of the area understandably don't want to see the industry that fuels their local economy transplanted to the Meadowlands, or anywhere else for that matter. Although Christie himself has fought to preserve Atlantic City as America's second most popular gambling town in the nation, his attitude is poised to change if his financial goals for 2014 are not met.
The Peoples' Fears
Atlantic City citizens want the profits and jobs associated with New Jersey gaming to stay in their neighborhood. Unfortunately for these people, some experts have predicted that this will not happen. Former casino publicist Wayne Schaffel foresees the imminent downfall of more Atlantic City casinos, suggesting that the Trump Plaza, Golden Nugget, and Showboat could be next in line for a downfall. While the closure of these facilities would certainly improve business in others, critics project that the overall profits for the area would still plunge.
Possible Meadowlands Expansion
The idea for expansion was not conceived haphazardly. By extending legalized gambling to the Meadowlands and other areas of New Jersey, the state might be able to reclaim some of the profits it has been losing to New York, Pennsylvania, and Connecticut gambling houses over the past 10 years. The Meadowlands already serves as a leisure destination with a horse racetrack and MetLife Stadium.
Owner Jeffrey Gural has verbalized his enthusiasm for the addition of a casino at his racetrack, indicating that such a measure would boost his business considerably. Gural recently added a $100 million grandstand to his racetrack which includes a food court, sports bar, and entertainment venue. He is known for his personable nature and his frequent interaction with track patrons.
Tropicana President Expresses Doubt
Tony Rodio, Tropicana Casino and Resort president, has voiced his conviction that a Meadowlands expansion would drastically hurt casino business in Atlantic City. Not only would profits go down, but current borrowing expenses would escalate for the businesses that remain. Rodio has referred to Christie's expansion idea as nothing but a “panacea” meant to temper the threat of competition from other states. He asserts that New jersey cannot dually support both gambling locations.
Christie's Projected Gambling Revenue
In spite of his threat, Christie has padded his 2014 budget with a projected $1 billion in gambling revenue to be attained by July. This figure suggests that the governor is optimistic about New Jersey's potential gaming revenue for the coming year. Less optimistic critics, however, have countered Christie's projection with estimates from anywhere between $200 and $500 million in gaming revenue. H2 Gambling Capital has predicted an overall revenue of $300 million, which translates to a state tax revenue of approximately $45 million.
The prospects for profit didn't always seem so bleak. Back in 2006, New Jersey gaming revenue soared to the amount of $5.2 billion. The economic slump that began in 2007, and continues today, is thought to be at least partially responsible for the state's gaming revenue decline. Speculators are hoping that the legalization of Internet gambling in late 2013 will eventually help bring totals back up.
Internet Gambling in New Jersey
Although brick-and-mortar casino business is hurting, Internet gaming in New Jersey is off to a terrific start. As of late December, more than 100,000 online accounts had been created, according to the Division of Gaming Enforcement. These accounts can all be linked to the seven Atlantic City casinos that have affiliated themselves with online gambling. In spite of this high number of accounts, it is impossible at this time for auditors to determine how many accounts are active. Another complicating factor is the fact that some individuals may have established more than one account. To all this, we must consider the risks of geo-fencing technolgy used to contain gambling within the walls of New Jersey.
The "Armpit of America"
Some people refer to New Jersey, specifically Atlantic City, as the "Armpit of America." Reasons for this include the perception that the town is 'sleazier' than Las Vegas, that the state is composed of nothing but crime-ridden big cities, and that ghettos and gangs from Philadelphia and New York City infiltrate the area. These prejudices give the state a bad name and do not help its prospects for improved tourism. Sites like the Official Tourism Website of New Jersey aim to eradicate these biases, promoting historical sites, amusement parks, shopping, and points of natural beauty that do indeed appeal to the masses.
Atlantic City Reforms: The Need for a Strategic Plan
Four years ago, Christie put the gambling industry in his state on notice that they had five years to turn things around and start making better profits for the state. With one year left to go, 2014 is likely to be a tense one as industry critics and supporters keep a watchful eye on the numbers. No concrete strategic plan has been suggested for gambling industry reform as of yet.