Jeff Gural Hopes His Meadowlands Racetrack Will Be Allowed to Install Gaming Machines
The East Coast Gaming Congress took place at the Borgata in Atlantic City on Wednesday and Thursday of this week. The gaming industry notables who gathered spoke on a number of issues, including proposals for a Meadowlands casino. Given the location of the Gaming Congress, such a topic sparked significant debate.
One of those who spoke was Jeff Gural, who owns the Meadowlands racetrack and two Upstate New York tracks. Gural discussed a proposed partnership between his racetrack and the Hard Rock Cafe to bring a casino to the Meadowlands. Gural told the assembled that such a casino would raise $500 million a year in tax revenues. $200 million of that cash would go to Atlantic City, under one proposal.
Jeff Gural Defends Stance
Over the course of the conference, Mr. Gural had to defend himself against charges his plan would be the deathblow for Atlantic City’s hope of recovery. Gural, whose two New York racetracks has the Video Lottery Terminal-type of slot machines, argues that the damage is already done and his proposal is the last hope Atlantic City has for recovery.
He told the News Observer, “My objective is not to destroy Atlantic City. The only source of new money for Atlantic City is us….I agree that gambling in the north is bad for Atlantic City, but there already is gambling in the north. It’s in Pennsylvania and New York. It’s only going to get worse.”
Higher Taxes for Meadowlands Casino
Jeff Gural pointed out that a Meadowlands racino like he is proposing would bring in 55% tax revenues. The current tax rate for Atlantic City casinos is 8%. The resulting $200 million in promised revenues could be used by Atlantic City to transition from a casino-based economic plan to more non-gaming attractions, such as shows, restaurants, nightclubs, and shopping. Such a business model worked for the Las Vegas Strip, which now collects 60% of its revenues from non-gaming activities.
Chris Brown Opposes North Jersey
Not everybody sees the issue the way Jeff Gural does. New Jersey State Assemblyman Chris Brown, an outspoken critic of ending the Atlantic City casino monopoly in New Jersey, says a North Jersey casino would signal the death knell of Atlantic City.
Assemblyman Brown said, “All you’re going to be doing is cannibalizing a market that is already oversaturated.”
Chris Brown was not the only vocal critic of Gural’s suggestion.
Mark Giannantonio of Resorts Casino
Mark Giannantonio, president of the Resorts Casino, said that a Meadowlands casino is a bad idea. Giannantonio said, “It’s surreal for me to listen to this and contemplate that we’re discussing north Jersey casinos…It is equally predictable that an expansion of gaming north of us–something we can control–will do more harm to this city than good.”
For over 25 years, Atlantic City was a viable gaming destination. At one time, it was the only gambling destination on the east coast. Even when the tribal gaming compact was created by the U.S. Supreme Court (and legislation based off their rulings), Atlantic City remained a solid location for gaming. When Pennsylvania turned their racetracks into racinos in 2004, it was only a matter of time before the new arrangement would harm Atlantic City.
Adam Rosenberg Predicts Atlantic City Fall
Fortress Investments managing director Adam Rosenberg predicts that more Atlantic City casinos will shut down in the next few years, though he would not predict which ones. Rosenberg said, “I will predict that more will go, and that’s a good and healthy thing.”
Economic health often involves businesses failing. Caesars Entertainment closed one of its four Atlantic City casinos–a profitable one–last year to spur business at its other three AC casinos. One business failing usually means more customers for its nearby rivals–it’s as simple as that.
The fact is, many people are starting to realize Atlantic City is a failing proposition. It is too far away from the major population centers to compete. While it’s location on the Jersey Shore was ideal when it had no competition, it now has no attractions you cannot find elsewhere. It has sentimentality and 37 years of history, and nothing else.
Legal Sports Betting
That is why Gov. Christie and New Jersey’s state politicians are fighting so hard for legalized sports betting. Running sportsbooks the way Las Vegas casinos do not only is a matter of fairness and equity, but it also would give New Jersey an east coast monopoly again–at least for a little while.
Eventually, New York and Pennsylvania also would acquire the right to run bookmaking businesses, which is what the NFL, Major League Baseball, the NBA, and NHL are really fighting against. They know New Jersey is fighting for a foot in the door, a door which bigger states would knock wide open. But in the interim, Atlantic City’s casinos might gain the breathing space they need to find a better way. That way might be investing in a North Jersey casino, something closer to New York City and its 10 million residents (and millions of yearly tourists).
Atlantic City: End of an Era
Atlantic City as a viable standalone gaming resort destination is dead. Jeff Gural and Adam Rosenberg are trying to convince detractors like Chris Brown and Mark Giannantonio that’s the case. Eventually, everyone will agree. By then, it might be too late for New Jersey.
