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Monday, April 19, 2010

An Opening Gambit for VLTs, Dead Beat State

A company operated by casino executives, not affiliated with Atlantic City, is dangling dollar signs in front of Governor Christie to get his blessing for a plan to bring slot machines to the Meadowlands. The proposal calls for a $500 million payment to the state if slots are up and running at the Meadowlands by June 30, 2011. An additional $100 million would be paid to the state for allowing Global Enterprises Meadowlands (GEM) to take over operation of the Meadowlands Racetrack as well as allowing them the right to build seven additional off-track wagering facilities in the state.

Sounds great, but hold your horses. Don't expect to see slots operating at the Meadowlands next June. Assuming the Christie administration green lights this idea, there are many hurdles to pass. First of all, Senate President Sweeney made it clear he will not allow any bill expanding gaming in New Jersey to come up for a vote. Unless he can be persuaded to change his mind, no proposal is going to get voted upon. Was Sweeney to change his mind and a bill approved in time, a referendum would need to be approved by the voters; no sure bet being Atlantic City interests and anti-gambling forces will be funding the opposition.

There is one wild card which can be played. Instead of slot machines, the state may consider VLTs. Were that the case, Governor Christie's Attorney General could issue an opinion saying VLTs are a lottery game, thus not requiring a referendum, but this would be going against a previous opinion by a prior Attorney General and would certainly end up in court, tying things up.

Assuming either path was successful, the state could not simply take GEM's offer; there would be a need to solicit bids to select an operator. As the case in these types of projects, the loser is sure to turn to the courts for relief. Hence, it would be later than June, 2011 for a slot machine to operate at the Meadowlands.

I truly don't think GEM expects their offer to be accepted ‘as is’ or seriously expects to have slot machines operating by next June. However, by floating a proposal offering hard dollars on the table, it does force serious discussion of casino gambling at the Meadowlands to take place. Hence, I would describe the offer as an opening gambit, moving the debate regarding Meadowlands slot machines off of square one.

Illinois can now be known as the Dead Beat State.  According to  The State of Illinois is not going to pay the rest of the purse money owed for last year's World Trotting Derby and the Review Stakes because there is no money in their budget.  If the  people owed money want to pursue their claim, they need to go to court.  To paraphrase an expression, "It's Good to be the Government".  

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