North Jersey Casino Ads Heat Up as November Referendum Approaches
Posted on: August 11, 2016, 04:00h.
Last updated on: August 11, 2016, 02:27h.
North Jersey casino ads are making their way into homes in the Garden State. In November voters in New Jersey will decide whether Donald Trump or Hillary Clinton is best suited to lead the country as president, but also decide if it’s time to end Atlantic City’s monopoly on gambling and bring casinos north.
The referendum would allow two casinos to be built in northern New Jersey with minimum investments of $1 billion each. If approved, up to $200 million in taxes stemming from the new gambling venues would be distributed to Atlantic City annually.
This month local television advertisements began flooding commercial breaks. Moody’s has forecasted that should casinos come to northern counties in New Jersey, additional Atlantic City venues will cease operations.
As Casino.org has been reporting, Carl Icahn announced last week that the Trump Taj Mahal will close following the Labor Day weekend.
All in Favor
“Our Turn NJ” is a pro-expansion ad highlighting how the casinos could benefit senior citizens.
Funded by former Reebok chairman Paul Fireman, the spot says, “New York and Pennsylvania have stolen billions of our gaming revenue, robbing us of dollars to fund programs like Meals-on-Wheels and the property tax freeze. Vote yes and support gaming expansion in Northern New Jersey to protect our seniors.”
Fireman is behind the $4 billion Liberty Rising resort and casino near Liberty State Park in Jersey City. Located adjacent to the Statue of Liberty, Fireman is responsible for building Liberty National Golf Club, a $250 million course that sits on a former dumpsite.
Fireman believes residents and visitors across the Hudson River in New York City would be enticed to visit the resort. The property would ferry travelers to and from Jersey City.
“We intend to take the money out of New York instead of New York taking money out of New Jersey,” Fireman told the Associated Press in May.
Fireman has the support of Governor Chris Christie (R) and various state lawmakers.
“The pending closure of the Trump Taj Mahal should serve as a wake-up call for Atlantic City officials to take advantage of the benefits of casino expansion,” State Sen. Paul Sarlo (D-District 36) told NorthJersey.com recently.
All Opposed
Not to be outdone, the opposition is also trying to reach voters. The side is thought to have the current majority, the most recent poll from Fairleigh Dickinson University showing 57 percent oppose the referendum.
Titled “Risky Bet,” antagonists to expansion say Trenton politicians can’t be trusted with the right to award casino bids.
“Trenton politicians want to risk putting two casinos in North Jersey,” a voiceover in the ad says. “From property tax hikes to lost pensions, these guys have broken promise after promise to us. Now, the politicians are stacking the deck so their rich, special interest friends win big while refusing to tell hardworking Jersey families whose backyard these casinos could end up in.”
Trenton’s Bad Bet, an organization based in Newark, produced the commercial. The No North Jersey Casinos Coalition, an Atlantic City-based group of local business leaders, organizations, and workers unions, also supports the campaign.
Television viewers in New Jersey should expect more frequent advertisements over the next three months leading up to the vote. If the referendum were held today, Atlantic City would likely retain its 40-year exclusivity on gambling.
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Senate President Sweeney has indicated it is the fault of the supporters of the referendum, for the likely failure. But if he is serious about gaming in North Jersey, his Legislature has to define where casinos can be located; to avoid NIMBY (Not In My Back Yard), which was the primary reason the 1974 casino referendum failed, 60% to 40%. And the Legislature needs to adopt tax rates, similar to those in PA (55% on slot win and 16% on table games); that would provide meaningful revenue that might convince AC interests, that they will benefit from their tax share, in spite of some loss in casino play. And for the NJ Seniors, an important voting bloc; it would project that their programs would benefit by probably $200 million annually; about the same amount they have lost from AC's tax, since Pennsylvania first approved slots, in next door Philadelphia. AC has to reinvent itself, once again, like it did in 1978. But we have lost the convenience factor to 95% of our previous monopoly market, which has had an enormous impact on mid-week play, where at one time we entertained over 14 million line run bus visitors; that has now declined by over 90%. As the Strip in Las Vegas learned in 1990, hosting the 170,000 attendee Comdex Convention; there are many ways to profit, besides the casino. In fact, at the 23 largest Strip resorts, casino win is under 35% of total revenue, and the casino department's contribution to EBITDA, was even less, at 27%. AC is not likely to see other revenues exceed casino win (now at 70%), but mid-week overnight demand from conventions and trade shows, could triple mid week room rates, benefit from public space rentals and profitable functions, while replacing comp or discounted guests, that also expect other inducements, like free play. And AC would still be a bargain, compared to Manhattan, or our other Eastern competition; and it would allow us to re-open some of our closed resorts (without a casino or a downsized one). Comparing the major Strip resorts, with the AC Boardwalk casinos, showed a big difference in annual occupancy (92.1% to 77.1%) but an even bigger difference in room rates ($163 to $92). If you look at AC hotel and casino posted room rates, it clearly indicates we are a weekend resort; outside the months of July and August. The convention trades are primarily mid-week, and in the off season; where AC needs to provide decent overnight demand, at top room rates, which will improve occupancy, revenue and profits for 200 nights a year. A period where the casinos are currently entertaining a small audience, mostly taking advantage of various promotional programs and discounted or free rooms, food and beverage.