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Best of Howard Stutz

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Howard Stutz
 

Talks focus on fixing Atlantic City, with a Vegas assist

9 September 2014

ATLANTIC CITY, N.J. -- (PRESS RELEASE) -- New Jersey Gov. Chris Christie said Monday the much-predicted obituary of the Boardwalk’s gaming market is far from accurate, despite the closing of one-quarter of the city’s casinos this year.

Christie, following a two-hour, 15-minute meeting with more than 30 local and state elected leaders, casino industry representatives, tourism officials and labor bosses, said his office set a series of tasks to be completed over the next month.

Christie did not reveal specific ideas for fixing Atlantic City, where gaming revenue has slid 60 percent since 2007. He said any jurisdiction would welcome the $2.5 billion in gaming revenue Atlantic City casinos produced last year, third highest of any region in the U.S.

“The big growth has been on the nongaming side,” Christie said at a news conference after the meeting. “A lot of people out there are declaring the demise of the city. That is far from true.”

Christie said the group would address some of the tasks over the next 30 days and meet again in 45 days.

“There are both short-term fixes and long-term action items,” Christie said at the offices of Casino Reinvestment Development Authority, an organization he created in a move to fix Atlantic City in 2011.

Christie said Atlantic City needs to evolve further away from a business model developed when it offered the only legalized gaming east of the Mississippi River.

He said the closing of the Atlantic Club in January, Showboat on Aug. 31, Revel on Sept. 2 and next week’s planned closing of Trump Plaza, were “inevitable” as the market lost business to neighboring states.

The closings have cost 8,000 casino workers their jobs since January.

Christie said Atlantic City must be remade into seaside destination where gaming is just one aspect of what attracts visitors.

Christie’s views were echoed by Caesars Entertainment Corporation Chairman Gary Loveman, who attended the meeting that was originally scheduled for 90 minutes. Caesars closed the Showboat and is trying to sell the building. The company also partnered with the Tropicana Atlantic City in buying and closing the bankrupt Atlantic Club.

In an interview before the meeting at his Harrah’s Resort Atlantic City office, Loveman said he expected Christie to lay out “a process for considering the future of Atlantic City.”

Loveman said the model, created in 1979, did well for 30 years until Pennsylvania, Delaware, Maryland, and New York began adding casinos.

“The institutional structure of Atlantic City was built around on the notion of a monopoly,” Loveman said. “Everyone has to realize you can’t hold onto a system built for 1979 in 2014 when gaming is all around you. It’s going to take all of us to consider how we will guide its future.”

The meeting was termed a summit on Atlantic City’s future. Christie in his opening remarks discussed $700 million in new capital investments in the city’s tourism industry and $115 million spent on new nongaming attractions.

At his news conference, Christie said he obtained commitments from casino leaders at the meeting, including Loveman and Tilman Fertitta, whose Houston-based company owns the Golden Nugget casinos in Las Vegas, Laughlin and Atlantic City.

“But that’s all I’m going to say,” Christie said.

UNITE HERE National President D. Taylor also attended the meeting. The organization is the parent group of Local 54 in Atlantic City and Culinary Local 226 in Las Vegas.

Christie told the Las Vegas Review-Journal that he spoke with Nevada Gov. Brian Sandoval about the two states possibly combining Internet gaming structure through an interstate compact, but he wouldn’t share specifics. New Jersey has full-on Internet gaming, which has produced $31.6 million in gaming revenue through July, far below lofty projections.

Earlier, Christie’s office issued a directive — based on the opinion of the state’s attorney general — that casinos and racetracks can offer sports betting, a move likely to be challenged in court by sports leagues.

Christie said previous federal court rulings found nothing in New Jersey law prohibiting casinos and horse tracks from offering sports betting, so long as it’s not sponsored or licensed by the state.

Soon afterward, one racetrack, Monmouth Park in Oceanport, said it was preparing to offer sports bets. The track has a deal with Las Vegas-based William Hill U.S.

In a statement, William Hill U.S. CEO Joe Asher said the company would review the directive.

“Obviously, this is a significant development,” Asher said. “Like others, we recognize that legalized sports betting is inevitable, and will be a good outcome for customers, states and the sports leagues. In light of our significant investment at Monmouth Park, we are happy that it appears racetracks and casinos in New Jersey will be taking sports bets sooner rather than later.”

Loveman said Caesars’ three Atlantic City casinos would not set up sports books any time soon.

“We still have concerns about the federal legal structure that would exist,” Loveman said, “Irrespective of what New Jersey does, I am an advocate of legalized sports betting everywhere.”
Talks focus on fixing Atlantic City, with a Vegas assist is republished from Online.CasinoCity.com.