Deutsche Bank Report Says New Jersey Should Open Casinos Beyond Atlantic City
Posted on: May 20, 2015, 02:44h.
Last updated on: May 20, 2015, 02:45h.
New Jersey has toyed with the idea of opening a casino in the northern part of the state, a move that would mark the first time casinos in the state had spread beyond Atlantic City.
That effort may get more support following a report by Deutsche Bank that says such a casino could be just what New Jersey needs.
Deutsche Bank analyst Andrew Zarnett filed a report last week that took an overall look at the New Jersey gaming industry, and found that it would be in the state’s best interest to build at least one casino in northern New Jersey, perhaps at the Meadowlands.
“We believe that one or two casinos in north Jersey could generate well over $500 million, putting ~$275 million into the state’s coffers and thus is a smart move for the state,” Zarnett wrote. “It’s good from a budgetary position and also for Atlantic City, as long as some of those tax revenues go back to that market.”
Talk of New Casino Intensifies
The topic of putting a casino at the Meadowlands or elsewhere in northern New Jersey heated up last year, as some lawmakers looked forward to potentially broaching the issue at the end of 2015 or in 2016.
In February 2011, Governor Chris Christie put an unofficial five-year hold on such talks as a way to give the city’s gaming industry time to improve without the pressure of another local casino potentially cannibalizing the market.
In particular, Senate President Stephen Sweeney (D-Gloucester) said last year that it might be possible to hold a statewide referendum on building new casinos elsewhere in the state in November 2015. Zarnett spoke to this possibility in his report.
“It is our belief that a ballot question to allow gaming outside of Atlantic City could come this November 15,” he wrote.
Voter Turnout Concerns
However, supporters of such a move may not be looking to hold the vote so soon. According to Sweeney, the expected lower voter turnout in an off year for elections could harm the measure, as voters from Atlantic City and nearby areas may be more motivated to come out and vote against it than voters from the northern part of the state are to support it.
That could mean holding the vote off until November 2016, when a presidential election will guarantee a high percentage of New Jersey adults head to the polls. But others who are in favor of the casino expansion still want to see a vote this year.
“We have to do it now, so we don’t fall even further and further behind other states,” said State Senator Ray Lesniak (D-Union County). “Atlantic City will continue to decline, and racing will continue to decline. This may very well be our last chance.”
Deutsche Bank Expects More Closures
The Deutsche Bank report also painted a grim outlook for Atlantic City’s casinos, projecting that gaming revenues in the city would fall to about $1.8 billion in 2017 due to increased gaming options in surrounding states. That could mean further casino closures in the years to come.
“We would expect Taj Mahal as well as a second Boardwalk casino to join the list of shuttered properties in the outer years,” Zarnett wrote.
The report’s conclusion is straightforward, and one that supporters of a north Jersey casino will be happy to quote.
“In summation, it’s time for New Jersey to push forward with plans for a North Jersey casino or casinos,” Zarnett wrote. “And as such, we believe that the next step is a constitutional referendum this November providing approval for gaming outside of Atlantic City.”