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Joe Weinert

Atlantic City Round-Up

22 April 2003

ATLANTIC CITY -- Southern New Jersey legislators and the Atlantic City gaming industry are discussing an increased casino-parking fee and a so-called "IGT tax" to avoid paying the direct casino taxes proposed by Gov. James McGreevey.

In addition, some Democrats are suggesting a graduated gaming tax on the casinos.

Legislators were uncharacteristically tight-lipped about the talks, but political and gaming sources confirmed that the discussion involves members of the McGreevey administration.

McGreevey has proposed hiking the gaming tax to 10 percent from 8 percent, imposing the 6 percent state sales tax on casino complimentaries, and creating a 7 percent lodging tax.

One alternative would be to raise the $2 casino-parking fee to at least $3 and eliminate the 50 cents per car that casinos now keep to cover administrative costs. Some legislators have discussed raising the fee to has much as $5. Last year, the state raised $15.9 million in casino parking fees.

Another idea would be to somehow impose a tax on wide-area progressive slots and other stand-alone slots that casinos lease on a daily basis. It's dubbed the "IGT tax" because International Game Technology of Reno, Nev., supplies 24 of Atlantic City's 28 wide-area progressives and also about 200 daily-lease games.

Casinos wholly support the notion because it would be revenge against a company they dislike for forcing them to lease slot machines instead of allowing them to buy the games. The casinos' lease payments can surpass the purchase cost in less than four months.

Under a graduated tax, higher-grossing casinos such as Bally's, Caesars and Trump Taj Mahal would pay higher tax rates than lower-grossing casinos such as Resorts and Sands.

The gaming-tax discussions are expected to heat up as the governor's June 30 deadline for signing a state budget approaches.


If New Jersey Gov. James McGreevey's gaming-tax proposals are enacted and he gets wish of installing racetrack slots, Atlantic City could expect 6.2 million fewer visits, a loss of $560 million in gaming revenue and a loss of 5,200 casino jobs and 6,800 non-casino jobs.

That's the conclusion of Michael Pollock's Gaming Industry Observer in an 85-page report commissioned by the Atlantic City Regional Chamber of Commerce and funded by the Casino Association of New Jersey.

The casino association promptly shipped copies of the report to McGreevey and every state legislator.

"This study is unprecedented in the depth of its analysis and frightening in the extent of its conclusions," chamber President Joseph Kelly said.

The vast majority of the impact would occur if the state allowed 9,000 slots at the Meadowlands, Monmouth Park and Freehold racetracks. McGreevey has abandoned the racetrack slots idea for this year.

The report, however, said the additional gaming taxes alone could severely crimp profits and lead to more than 3,000 job losses in the casino and non-casino sectors.


A member of the Casino Control Commission thinks Trump Marina should pay $60,000 for allowing a 19-year-old to repeatedly gamble.

The Division of Gaming Enforcement thinks the fine could be $1.2 million, but says $199,000 is sufficient.

The full Casino Control Commission will have to decide between the disparate amounts when it considers the case later this spring.

Trump Marina knows it erred and appears willing to pay the $60,000. It said the gambler's mature look -- two experts testified at a hearing that he indeed looked to be in 20s -- and his certification that he was at least 21 are mitigating circumstances.

The DGE said Trump Marina failed to ask the gambler to show identification when it issued him a rating card and did not have adequate procedures in place for verifying gamblers' ages.

In arguing for a more stringent fine, Deputy Attorney General Timothy Ficchi said in his petition, "Such a fine would constitute a clear statement that the commission's hitherto unblemished record of treating underage gambling in a manner commensurate with the serious social problem that it is remains intact."


Donald Trump's casino company lost two expansion opportunities in about a week.

First, the Eastern Pequot tribe in Connecticut abandoned a casino-development deal that its smaller faction had signed with Trump Hotels & Casino Resorts in favor of a Connecticut developer. Trump Hotels had signed the 1999 deal with the Paucatuck Eastern Pequots, who early this year were merged by the federal government with the larger Eastern Pequots.

Second, the New York Racing Association announced that it chose MGM Mirage over Trump Hotels to manage its planned slot operation at Aqueduct racetrack in Queens. The track plans to have 4,500 slots, making it the largest such operation in the country.

"Both companies made terrific presentations. Our executive committee thought we'd be better off in the long run to move forward with MGM Mirage," NYRA Senior Vice President Bill Nader said.

One factor in selecting a company was its ability to raise $100 million for the slot expansion, Nader said. MGM Mirage enjoys debt ratings at or near investment grade, whereas Trump Hotels' debt is low-rated junk.

NYRA said Aqueduct slots would open seven months after racetracks agree with the state on a more favorable split of the revenue.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can reached at