Predictably, as soon as New York State announced (last week) that it was awarding Vegas-style casino licenses to three upstate locations, the chatter about the feasibility of a casino in north Jersey was back in full force.
A casino in Jersey City, or in the Meadowlands, or both, certainly seems to offer rosy possibilities. The destination, directly across the Hudson River from Manhattan, is well positioned to attract the high-income crowds of the Big Apple. Top local officials predict that such a casino would be the highest grossing in the country and perhaps the world.
Some of the proceeds of said casino would go toward rebuilding Atlantic City, which has largely crumbled beneath the weight of its failing gambling halls. Even better yet for the Garden State, the property would be positioned to siphon off New York City gamblers who otherwise would travel to the casinos in northeastern Pennsylvania, casinos specifically placed to poach traffic from Atlantic City. Should these Pennsylvania casinos begin to falter and then shut their doors because of a north Jersey casino, there would certainly be an element of vindictive justice.
Still, it would be foolishness to take politicians’ words to heart about a casino in north Jersey being a panacea that can unleash a new era of prosperity for the state. True, the state has historically been aggressive in expanding its repertoire of gambling offerings – everything from Internet wagering to skill-based social games to taking on the federal government over sports betting. But there still is a difference between fantasy and reality.
Building a casino in Jersey City isn’t as easy as flipping a light switch. It would require the state’s constitution to be amended, no small task, to authorize casino gambling in jurisdictions outside of Atlantic City. This would most likely be done through a ballot measure put to public referendum in 2015. Negotiations are already in full gear to draft such a proposal
Such a measure, in 2015, would be similar to the measure that first allowed gambling in Atlantic City. But as the unfortunately named CRAC (Committee to Rebuild Atlantic City) quickly learned in the 1970s, amending the constitution to expand gaming requires an immense accumulation and leveraging of political capital.
Accordingly, getting gambling in Atlantic City was more a result of crafty politics and campaign strategy than of a groundswell of support for legalized gambling in the state. The first attempt, allowing casinos statewide, was rejected in 1974. The question was posed again in 1976 with several important modifications. First, casinos would be confined to just Atlantic City. Second, the tax revenue generated would go towards government programs benefitting senior citizens, universally a powerful voting bloc. The 1976 measure passed.
Convincing voters to approve casinos in north Jersey, in 2015, will be a tougher sell. A quick scan through the comments sections of several recent news articles about a possible north Jersey casino shows a resounding antipathy for the idea, though this is clearly a non-random sample. But inarguably, casino gaming is no longer in an experimental phase of expansion, the low hanging fruit interest groups are no longer in play, and many voters are simply are not buying the standard arguments any more.
The competitive landscape in the mid-Atlantic casino market is also vastly different and becoming more cutthroat by the day. A casino only has a competitive advantage until being undercut by someone else building closer to a major population center.
The notion that the best way to aid Atlantic City is by building a casino in north Jersey that would capture its market share and redistribute profits will have a hard time passing the smell test. There are many who say that New Jersey would simply be cannibalizing its own market by building a north Jersey casino.
Yes, such a casino could, in theory, help subsidize and offer economic aid to the ailing south Jersey shore, but similar promises were made back in 1976 about gambling revenues being used to finance Atlantic City’s redevelopment. Almost 40 years later, the city is still almost wholly dependent on casinos, though that is slowly changing. Much of the promised money from the 1976 measure was not put toward rebuilding the city, but was instead redirected for other purposes.
There are also questions as to whether (and when) a north Jersey casino would be profitable enough to transfer the promised financial assistance to Atlantic City. Such a project would take years and billions of dollars to complete, and – much like the Revel – would likely be strapped with a heavy debt load upon opening. It could be years before the location generated any net revenue. Even if it did become the most profitable casino in the country, how long would that last before New York decided to escalate the casino wars by allowing a new property in Manhattan proper?
