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Tuesday, November 30, 2010

Moodys On Atlantic City Reforms: A Waste of Time

The Press of Atlantic City, the mouthpiece of Atlantic City casinos makes the case rational people have been saying for a long time; Atlantic City is a lost cause.  Moody's, a national bond rating agency says the proposed reforms being planned by the state legislature are destined to failure.  Specifically, Moody's claims: 

The initiatives proposed are a zero sum game.  Revenue into one pocket will come from another pocket.  One proposal is to allow mini-resorts of two hundred rooms in Atlantic City.  All this proposal will allow is gamblers playing at casinos like Borgota to take their gambling dollars to these smaller casinos.

Internet Gaming and Sports Wagering?  Will prove to initiate an arms race with other states offering Internet gaming to their residents and if and when the federal band on sports wagering is overturned; other states will be quick to offer wagering on sporting events so not to give another state an advantage over their own gambling empire.  It is important to note that Moody's anticipates any attempt to overturn the federal ban a long shot at best.

And of course, the economy should be a drag on gambling houses for quite a while.  People tend to be more responsible than we give them credit for.  People will eat their gambling dollars before betting their eating dollars.

What does all this suggest?  What we have been saying for a long time.  Casino gambling is a commodity; there is nothing to differentiate gambling at Atlantic City from gambling at Dover, Delaware or Tunica, MS unless you want to consider crime statistics.  Of course, one of the proponents of propping up Atlantic City claims "changes are required to give consumers a reason to come to Atlantic City".  Short of putting slot machines in the summer on the beach, I don't see what Atlantic City can offer that other casino destinations can't replicate, and it will be labor intensive to move the machines up and down the beach depending on the tides.

There really is one game changer available to New Jersey Gaming interests; opening a new market to casino gambling and that would be the Meadowlands.  Do the horsemen want it all for themselves?  No; they are more than willing to share the market with Atlantic City gaming interests; let Atlantic Casino gaming interests take the lion share of the revenue from the Meadowlands and just cut the racing industry in for a small share.  Unfortunately, the state leaders are either in denial, thinking they can revive Atlantic City into a gaming destination (an idea which has long ago sailed off) or they are beholden to the campaign dollars of gaming companies who don't want to cut racing in for any share of the profits at the Meadowlands when the casino eventually opens.  I think we will know real soon the motives as it is my guess within two years a constitutional amendment will be voted upon to allow slots at the Meadowlands.

Fortunately, for racing, former opponents; legislative leaders like Senate President Sweeney and Senator Jim Whelan are part of the group in denial, thinking Atlantic City will survive; which explains their willingness to offer proposals to allow racing to survive.  It is Christie and Hanson who are of the group who know Atlantic City will fail that don't wish for racing to survive, being unwilling to meet with racing interests to work on a compromise.  They know they need to get racing out of the way before they open a casino palace in the Meadowlands  This makes me suspect Christie will veto any legislation which may be beneficial to racing..  The quetion is will the Republicans in the legislature be willing to vote their conscious or hold together for their leader.

The next two weeks will be interesting.  Break out the alka-seltzer. 


The_Knight_Sky said...

What's your take on the $271 million bill NJ now faces thanks to the nixed ARC tunnel?

Pacingguy said...

Time to pay the bill. Actually, in this respect I believe Christie did the right thing. Things in this state need to be fixed and without knowing how bad the overrun exposure would be, he made the right decision.

Of course, with horse racing, it really is priming the pump. Put a little money up and make ten times that amount in tax revenue.

Anonymous said...

Nice article.

Neighboring states (New York, Pennsylvania, Delaware) offering slot machines or video lottery terminals (VLT's) at horse racing venues continue to attract tourism and gaming dollars away from New Jersey. This trend erodes expansion of the racing industry and could have disastrous consequences for the state’s economy. The Garden State stands to lose one of its premier agribusiness which generates $780 million of economic impact annually, 7,000 jobs, $110 million in federal, state and local taxes, and 57,000 acres of working agricultural landscape and open space if racing-related training and breeding farms leave New Jersey. These figures do not include the non-racing segment of the horse industry.------- From The Rutgers Equine Science Center independent in-depth report of the impact of slot machines or video lottery terminals on the horse racing and breeding industry, and agriculture and open space.

For more information and some great articles, please check out our Facebook age:!/pages/Save-New-Jersey-Horse-Racing-Allow-VLTs-at-the-Meadowlands/129193943805073

Pacingguy said...

I'll be perfectly honest, I hate the fact racing depends on slots; they are a temporary fix. That being said, not having them puts NJ racing at a terrible disadvantage.

What makes me angry as a NJ taxpayer is the fact by refusing to put slots in NJ, they are giving away money to the New York and Pennslyvania. What' is Christie's plan to recover this money? A line on the tax form like the Use Tax?

Where is Christie representing tax payers of this state. As far as I am concerned, he should be recalled for failing to look after the public's best interest.