Gaming | New Jersey: Voters in dark on key details of casino expansion referendum

When New Jerseyans decide in November whether to approve two new casinos in the northern part of the state, they’ll likely have only a vague notion of what they’re voting on.
Key details of a referendum authorized this week by the Legislature remain unresolved —
and appear likely to stay that way until after voters have had their say.
Among them: how much the new casinos may generate in gambling winnings, how much they will pay in taxes, and even where the casinos will be located and who will own them.
“These are questions that anyone would ask before they even begin debate,” said Assemblyman Chris Brown, an Atlantic County Republican who tried unsuccessfully to derail the referendum that will appear on the November ballot. “What is the revenue? What is the tax rate? Who’s going to pay for infrastructure improvements near these new casinos? I think these are all fair questions.”
But not many are likely to be answered before New Jerseyans enter the voting booth. Sen. Paul Sarlo, a Bergen County Democrat, said, “Many of your concerns will be addressed in enabling legislation that will come before this body once a referendum passes.”
In other words: Pass the law, and let us fill in the details afterward.
Senate President Steve Sweeney, a southern New Jersey Democrat and likely candidate for governor next year, won’t commit to settling key details of the plan for northern New Jersey casinos before voters go to the polls.
“We might be able to,” he said. “Listen, we’re not trying to hide anything. We will do the enabling legislation soon; how soon, I don’t know.”
Assemblyman Ralph Caputo, an Essex County Democrat and key backer of casino expansion, has said he thinks it should be done before the referendum so that voters understand what they’re being asked to decide.
Some key details that may or may not be settled before voters go to the polls:

WHERE?
The referendum does not specify where the casinos would go, only that they be in separate counties at least 72 miles from Atlantic City. The most frequently mentioned locations are the East Rutherford Meadowlands, where racetrack operator Jeff Gural and Hard Rock International have proposed a casino, and in Jersey City, across the Hudson River from Manhattan, where footwear magnate Paul Fireman has proposed a casino costing as much as USD4 billion or $5 billion. But vast other areas of the state remain eligible as well.
HOW MUCH?
The biggest question is how much the new casinos are likely to earn — and pay. And no one can answer that with any degree of certainty right now. Industry and Wall Street analysts have told The Associated Press the new casinos could be among the most successful in the country, as long as New York City doesn’t allow a casino nearby shortly afterward.
Gural estimates a Meadowlands casino would take in $800 million to $900 million a year from gamblers, ranking it among the most successful in the nation. Some analysts think a Meadowlands casino could exceed $1 billion in annual revenue, at least before it has a nearby competitor in northern New Jersey. But Brown cites a Wall Street study predicting the haul would be closer to $500 million a year.
THE TAX MAN
Perhaps the most important decision for New Jersey officials and residents is the tax rate the casinos would pay. Gural has offered to pay 55 percent, but Sweeney has said that since a requirement that the casinos cost at least $1 billion apiece, the tax rate would have to be much lower than that in order to keep them from failing.
The tax rate directly determines how much money will be sent to help compensate Atlantic City for the inevitable loss of business to new in-state competition; to tax relief and programs for senior citizens and the disabled, to the state’s horse racing industry, and to municipalities and counties that host the casinos.
Without reliable revenue estimates and a firm tax rate, no one can begin to accurately estimate how much any of those payments might be. Atlantic City’s casinos currently pay an 8 percent tax and a 1.25 percent mandatory redevelopment payment on their revenues.
“We’re voting on something where there are more questions than answers,” said Sen James Whelan, the former Democratic mayor of Atlantic City. By Wayne Parry, Trenton (NJ)

WHO?
The bill gives owners of existing Atlantic City casinos first crack at the two new licenses. If they fail to apply within 60 days, the licenses would be thrown open to anyone. AP