NJ lawmakers seek to exploit online gambling opportunities

Already facing competition from the ever-expanding out-of-state gambling market, including the recently opened MGM National Harbor in Maryland, the city’s four-decade-old state casino monopoly is again under attack.

2016-12-12

United States

Reading time 2:13 min

Already facing competition from the ever-expanding out-of-state gambling market, including the recently opened MGM National Harbor in Maryland, the city’s four-decade-old state casino monopoly is again under attack.

State lawmakers are now proposing a bill that would allow Monmouth Park Racetrack in Oceanport and Meadowlands Racing & Entertainment in East Rutherford to partner with existing casino operators to create areas inside the racetracks that offer online gambling. The move comes just a month after New Jersey voters overwhelmingly rejected a plan to expand gambling beyond the city.

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The internet cafes, as they are being called, would increase revenue for the state’s struggling horse-racing industry while allowing casinos to show off their internet gambling operations, supporters of the plan said

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But increasing gambling options within the state could lead to a decrease in the number of people heading to the resort, said Anthony Marino, a local market analyst and retired executive with the South Jersey Transportation Authority.

Since 2009, traffic at the Atlantic City Expressway’s Pleasantville Toll Plaza, traditionally an indicator of people heading into the resort, has declined steadily. In 2009, more than 23.9 million cars used the toll plaza; in 2015 that number had plummeted to 18.5 million.

“Allowing any form of casino-like gaming at the Meadowlands, Freehold or Monmouth Park racetracks would most likely have a negative impact on visitation numbers in Atlantic City, although probably not as much as allowing actual full-service casinos as proposed in the recently defeated North Jersey casino referendum,” Marino said. “The rapid rise of internet gaming in New Jersey has already cut into visitor numbers traveling to Atlantic City; expanding that experience to racetracks close to the dense central and North Jersey population would give additional convenience gamblers reason to avoid the journey south to Atlantic City.”

Under the plan, the tracks would lease out space to casino operators for online gambling.

“This is a win-win for both the racetracks and the casino industry,” said Dennis Drazin, adviser to Monmouth Park. “This would be purely at the will of the casinos. I believe this would give casinos a chance to grow their business. It would give them a chance to grow their online business. They don’t have to do it if they don’t want to.”

Drazin said he has been approached by a couple of casinos about the proposal, but he would not say which expressed interest.

The Casino Association of New Jersey declined to comment on the proposal.

“We can only hope that within the module there is room for a positive revenue stream for both the racetrack industry and A.C.,” said Bob Ambrose, instructor of hospitality and gaming at Drexel University. “This model certainly cannot hurt the racing industry that is trying so desperately to survive. And in the same thought, A.C. does not need a sucker punch at this time as it continues to diversify its offerings.”

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The new proposal comes as some lawmakers continue to look at ways to expand gaming beyond Atlantic City without a referendum

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Assemblyman Ralph Caputo, D-Essex, has said he is exploring the idea of putting video lottery machines at racetracks as a way to boost revenue at tracks without a public referendum. According to a 1982 ruling by former Attorney General Irwin Kimmelman, the lottery terminals do not require a public referendum, he said.