Meadowlands News

The Record

State Senate President Stephen Sweeney, one of the staunchest defenders of Atlantic City’s gambling monopoly, said Wednesday that he has held private discussions with officials in North Jersey for the past year about allowing casinos in the northern part of the state.

Sweeney’s revelation — made during a meeting with The Record’s editorial board — is at odds with the South Jersey Democrat’s public statements in which he has adamantly defended a five-year moratorium, until early 2016, on any discussion of casino gambling in the state beyond Atlantic City. The motivation for that ban, developed in partnership with Governor Christie, was to give the struggling seaside resort a chance to get back on its feet.

But on Wednesday, Sweeney said there is a “very real possibility” that a statewide proposal on expanded gaming could be placed on the November 2015 ballot.

That would move up the timetable for the potential approval of a casino in the Meadowlands or another North Jersey location by at least a year, since continuing the ban in full force would have kept the question off the ballot until November 2016 at the earliest.

Sweeney’s statement comes amid continuing financial woes for Atlantic City’s casinos and the prospect of enhanced competition from locations in New York State — factors that have led some to question whether the ban made sense any longer.

Sweeney said any plans for North Jersey gaming halls would have to include specifics on how revenue from those new sites could help Atlantic City, where one casino closed in January, another will close in August, and a third is facing Chapter 11 bankruptcy restructuring for a second time in two years.

“I’ve talked to people up here about gaming,” Sweeney said, referring to North Jersey officials. “If everyone is telling the truth – and you know I’m skeptical, too – then they care about Atlantic City, too. So if there is a true willingness – and I am taking everyone at their word – yeah, I am looking at it and I have looked at it for almost a year.”

Sweeney’s change of heart was welcomed by Assemblyman Ralph Caputo, D-Essex, a former Atlantic City casino executive who supports a plan to bring a casino to the Meadowlands and possibly a second such gambling hall elsewhere in North Jersey.

“I’m very pleased that he has opened his mind to the possibility of helping the state’s gaming business statewide,” Caputo said. “Atlantic City is under tremendous strain, and we can’t just abandon them.”

Caputo has called for a 50 percent tax rate — more than five times what’s paid by Atlantic City’s casinos — at any North Jersey site as a way of ensuring that “the big dollars” needed to revitalize Atlantic City could be generated.

Roger Gros, the publisher of Global Gaming Business magazine, who has closely followed the Atlantic City casino industry for more than three decades, said he was not surprised by Sweeney’s comments.

“A casino in the Meadowlands would be good for the state because it would partially recapture some of the gaming revenue that has been going to New York and Pennsylvania after casinos opened there,” Gros said, adding: “The ball is in the court of Atlantic City casino operators now” to change their tune and seek a role in jointly managing a North Jersey casino.

Sweeney said there was a reason that he has “publicly said things completely on the contrary” of his comments Wednesday, which included discussion of the Meadowlands and a reference to the possibility of Jersey City as the home for a casino.

“I thought it was unfair for people to be advancing bills and calling on things and showboating politically,” Sweeney said.

Caputo shook off the comments, saying, “As long as we get the results, that’s what matters.”

State Sen. Steven Oroho, R-Sussex, also backed Sweeney’s sentiments.

“By co-branding new gaming venues with the global brand Atlantic City already has built up, and by leveraging loyalty programs, we can help make Atlantic City a preeminent destination location,” Oroho said.

State Sen. Paul Sarlo, D-Wood-Ridge, a leading proponent of a Meadowlands casino project for many years, confirmed that he was one of those with whom Sweeney had been having private conversations. Sarlo added that he is “very confident” of passage of a gambling proposal next year if the measure gets on the ballot.

Sweeney has said repeatedly that no expanded gaming bill will be up for discussion in the state Senate as long as he holds his current post. On Wednesday, though, he was discussing how to craft the required constitutional amendment and referendum that would allow for just such an expansion.

“We can’t do it this year because we’d have to get it done by July 14,” Sweeney said. “We aren’t rushing this – it’s too big.”

That disappointed state Sen. Ray Lesniak, D-Union, the leading supporter on gambling issues in Trenton.

“I congratulate Senator Swee­ney for opening this door, but we need to walk through it with a referendum on this year’s ballot,” said Lesniak, while acknowledging it appears to be too late.

Christie announced the moratorium in February 2011 as part of a five-year plan to revitalize Atlantic City, which included creation of a tourism district and streamlining of some regulations deemed overly onerous by casino operators. A spokesman for Christie did not respond to a request for comment Wednesday.

Since the moratorium, the Atlantic City casino industry has continued to experience further dwindling of annual revenues – down now to about half of the 2006 peak of $5 billion. Increased competition from eastern Pennsylvania casinos and a stagnant economy have contributed to the woes, and New York is expected later this year to approve plans for four full-fledged casinos.

Bids received Monday by New York gaming regulators include a plan by Caesars – which operates four Atlantic City properties — for an $880 million casino near the Woodbury Common outlet shops at Exit 16 of the New York State Thruway. Another would put a casino even closer to New Jersey, in Tuxedo at the location of the Renaissance Faire off Route 17A.

The Atlantic Club, formerly the Atlantic City Hilton, closed in January. Caesars announced last week that its Showboat property in the city would close Aug. 31 — dropping the number of casino properties to 10 — and Revel employees have been informed that the 2-year-old, $2.4 billion casino may shut its doors in August as well if a buyer is not found.

Former Atlantic City casino executive Steve Norton, with roots in the industry dating back to the dawn of gaming there in 1978, estimated that the state could collect $300 million to $350 million annually in taxes from a Meadowlands casino. Norton said that if half of that money went toward trying to revive Atlantic City, “it could turn the tide” of declining visitors.

Sweeney’s comments come less than a week after prominent U.S. casino industry analyst Andrew Zarnett of Deutsche Bank declared in the wake of the Showboat news that “it’s time for operators and politicians to stop dreaming about a false Atlantic City recovery.”

In his note to investors, Zarnett added that the city realistically could “support only six, maybe seven casinos and thus, more supply needs to come out of the market.”

Gros agreed, saying, “There’s more pain to come in Atlantic City, no matter what.”

Email: phillis@northjersey.com and brennan@northjersey.com