Proposed NJ Casino Expansion Raises Questions Of Favoritism Toward Caesars, MGM

Both halves of the New Jersey Legislature, with a little help from Governor Chris Christie, recently agreed upon terms for a bill that would expand casinos to northern New Jersey. The final version of the casino expansion bill was written by the senate and now has amendments that stem from the assembly’s version.

Last Thursday, the bill passed a senate committee 9-2. Now the bill heads to the assembly where it must pass a committee there. If that works out, a super majority of three-fifths of the legislature as a whole must pass the bill, at which point it goes straight to the November 2016 ballot.

Currently, the bill says that two casino licenses will be made available in northern New Jersey. At first the licenses will only be made available to existing Atlantic City casinos. If an Atlantic City casino chooses to bid on one of the two licenses, it has 60 days to submit an application, and six months to formulate an investment plan of at least $1 billion. If no Atlantic City property submits an application, the licenses will be made available to any U.S casino operator.

Does the bill unfairly favor MGM and Caesars?

Opponents of the expansion bill have begun to speak out, claiming the bill is catering to big casino business and not towards the citizens of Atlantic City. One outspoken opponent of the bill is Jim Whelan, state senator and former Atlantic City mayor. Whelan has made statements voicing his suspicions about the expansion and questioning the fairness of the bill.

On January 7, Whelan spoke to the committee about his concerns and what he believes to be favoritism towards casino operators like MGM and Caesars:

“This is wired for MGM and Caesars; that’s where this is going. MGM hasn’t invested a hard nickel in Atlantic City of construction or operation — ever. They never have.”

MGM and Boyd Gaming Corporation are 50/50 owners of the Borgata, which is the most successful casino and largest employer in Atlantic City. However, one logical point Whelan made when speaking to the committee was about fairness of who is actually able to bid or apply for licenses.

Mohegan Sun, a tribal casino located in Connecticut, has spent a significant amount of money restoring Resorts AC.  However, despite tremendous investment in the property, Mohegan Sun is ineligible for the new licenses under the new bill because they own less than 50 percent of the casino.

Is the future for north NJ Casinos as bright as lawmakers hope?

Every New Jersey lawmaker is passionate about the outcome of the casino expansion, and even with an agreed upon bill there are still a lot of arguments about what end results it might produce. Many feel that expanding gambling to northern New Jersey will mark the end of Atlantic City.

Earlier this January, Moody’s Investor Service released a report with words of caution directed towards New Jersey lawmakers. The investment firm predicts the expansion will cause two to three more casino closures in Atlantic City.

Though most experts agree the expansion will ultimately hurt Atlantic City, many lawmakers simply do not feel that Atlantic City deserves to be bailed out. The city has a long history of fiscal irresponsibility, and new casino companies could potentially help revitalize New Jersey’s stagnant gambling industry.

New Jersey Senator Pete Barnes III made several harsh comments about Atlantic City’s irresponsibility at the committee meeting:

“Atlantic City, for 40 years, had a monopoly not just in New Jersey… but for the entire East Coast. Why didn’t Atlantic City put some money away during flush times?”

About the Author

Rudee Rossignol

Las Vegas-based Rudee writes about a variety of topics, all surrounding regulated U.S. online gambling. A longtime poker player, she offers an on-the-ground take on Internet gaming matters.