Atlantic City casinos object to legislation allowing 'boutique' gaming halls

The Casino Association of New Jersey, the trade group representing Atlantic City’s gambling industry, objects to legislation passed last week by the state Senate that would make it easier for developers to build two “boutique” casinos on the Boardwalk.

The association said competition from gaming markets in surrounding states has already put Atlantic City under great strain, resulting in the closings of the Atlantic Club, Showboat, Revel and Trump Plaza casinos last year.

“In view of these circumstances, the city clearly does not need any more gaming product,” the association said in a statement.

By a 39-0 vote Thursday, the Senate eased requirements of a 2011 law that originally allowed for the development of two boutique casinos on the Boardwalk. The changes eliminate the requirement that at least one of the microcasinos eventually expand from 200 to 500 hotel rooms.

The original bill also required developers to build their projects from scratch, but the new legislation allows existing noncasino hotels to convert themselves into smaller-scale gaming halls. That change has prompted strong criticism from the casino association.

“Changing the rules that have been in place for close to four decades in order to add additional gaming inventory to an already saturated market would be harmful and, quite frankly, counterproductive to Atlantic City’s overall revitalization efforts,” the association said.

Following the closings of the four megacasinos last year, lawmakers have been looking for cheaper, quicker options to help revitalize the local economy, including the development of boutique gaming halls. The smaller casinos could have as few as 200 hotel rooms instead of the current threshold of at least 500 rooms for the full-fledged casinos.

However, the association argues that microcasinos would simply create more competition for Atlantic City’s existing gaming companies — without having to make the significant investment required of the bigger casinos for hotel rooms, restaurants and entertainment attractions. In particular, the association objects to plans that would allow existing noncasino hotels to transform themselves into boutique gaming halls.

Curtis Bashaw, owner of The Chelsea hotel, wants to create an upscale, clublike casino in his Boardwalk property by mixing in some table games and slot machines on the fifth floor to complement the dining and nightclub attractions.

Bashaw told The Press of Atlantic City last week that boutique casinos would give customers a more intimate alternative to the “giant, one-size” casino floors that have dominated the gambling industry since the 1970s.

This is the second time Atlantic City has pushed the idea of smaller casinos as a catalyst for growth. The original bill in 2011 failed to produce any boutique casinos, although Hard Rock International proposed one project before killing it in 2012.

Supporters hope that by loosening the bill’s original requirements, new jobs and development will follow.

Although the legislation has been approved by the Senate, the full Assembly has not yet voted on it. The Assembly did not act on the bill before heading out for the Legislature’s summer recess, so it now appears a vote will be delayed until the fall.

Assemblymen Vince Mazzeo, D-Atlantic, and John Burzichelli, D-Cumberland, Gloucester, Salem, two of the sponsors of the legislation, said boutique casinos mesh with Atlantic City’s overall redevelopment strategy to create more tourist attractions.
“It’s an added, nice feature for a hotel and keeps additional revenue generating, especially during the winter and slow times,” Mazzeo said. “There definitely can be a fit for these boutique casinos in Atlantic City.”

Mazzeo believes there is a “good shot” for the Assembly to pass the legislation in the fall, but Burzichelli sounded even more confident of the bill’s chances for final approval.

“This process is moving along at a pretty nice clip,” Burzichelli said. “It was already approved by a 39-0 Senate vote. You should be encouraged that this process is very much alive.”

Burzichelli noted that the key for getting the existing casinos to accept the legislation is to prove how boutique gaming halls would be part of a “holistic approach” for revitalizing Atlantic City’s economy.