|
|
|
The New York Times
February 27, 2013
As Casinos Struggle, New Jersey Tries New Ways to Bet
By KATE ZERNIKE
TRENTON — A generation ago, New Jersey introduced casino gambling to Atlantic City to boost the sagging fortunes of the nation’s most famous boardwalk resort.
Now, with the casinos themselves ailing — a shimmering $2.6 billion resort built with tax incentives announced last week that it was entering bankruptcy less than a year after it opened — the state is doubling down.
Having grown accustomed to the boost that gambling dollars provides its budget, the state is leading the race to embrace increasingly popular but still controversial models that would extend betting well beyond the destination casino approach.
Gov. Chris Christie signed a bill on Tuesday authorizing Internet gambling, which would allow people to play casino games from their mobile phones or laptops. He is also in court fighting a federal ban on sports betting, having signed a law last year that would legalize it.
At the same time, hotels in Atlantic City are experimenting with in-room gambling, as accessible and private as a minibar or on-demand movies. And lawmakers on the opposite side of the state envision pop-up casinos — one legislator likened them to county fairs — at concerts or sporting events.
Much as Atlantic City set the model for the explosion of casinos across the country over the last 20 years, New Jersey’s move signals the future of gambling, as states try to tap into the money already flowing to the black market or offshore betting companies, and entice a new generation of gamblers who might graduate from FarmVille to online blackjack, and ideally to an actual casino.
Mr. Christie, a Republican, called the Internet gambling bill a “historic opportunity to continue the state’s leadership as a premier destination for tourism and entertainment.”
He also pointed to the damage Hurricane Sandy brought to the state, saying, “In the wake of devastating losses suffered by our residents in recent months, we must embrace new ideas to fuel our reconstruction and continued prosperity.”
While New Jersey is pushing hardest, other states are not far behind. Delaware and Nevada recently signing bills to allow online betting.
It remains unclear, however, whether the moves will save the traditional gambling industry and provide a boon in tax revenues, or ultimately produce more competition for a limited pool of gamblers.
Arguments about the dangers of people’s gambling their savings away have been all but absent. Lawmakers here were mostly concerned about who would get what piece of the pie — the casinos, the racetracks or the state. The one senator to vote against Internet gambling, Michael Doherty, objected only because he argued the smarter move was to build casinos close to big population centers.
Donald Weinbaum, the director of the Council on Compulsive Gambling of New Jersey, said: “Increased access to gambling increases the incidence of gambling addictions, and the Internet could not be more accessible. It’s going to accelerate the progression of problems for people who are already at risk.”
When casinos first opened in Atlantic City, New Jersey voters were firm that they wanted to limit the growth of gambling. They rejected a 1974 referendum to allow casinos statewide, but narrowly approved one two years later that allowed them only within the confines of the city, a once-glamorous beach community that had the nation’s first boardwalk but had lost tourists to other resorts and gained a reputation for crime.
For a time, it was the Eastern capital of American gambling. Casino revenues rose every year, even as Indian casinos opened new fronts in Connecticut.
But in 2007, gross operating profits tumbled 9.6 percent, to $1.25 billion. Casino profits declined around 25 percent in subsequent years, lost to the lure of casinos in neighboring Delaware, New York and Pennsylvania.
Still, New Jersey counts on the casinos for about $300 million in tax revenue. Recognizing Atlantic City’s importance, Mr. Christie adopted in 2010 a five-year plan to save it, creating a tourism district and a $30 million marketing plan. When investors threatened not to build Revel, the first new casino since 2003, the governor offered $261 million in tax incentives to prop it up.
With Revel now in bankruptcy, the focus is on the new gambling options to save Atlantic City.
Mr. Christie’s budget counts on taking in $180 million in tax revenue from Internet gambling next year. Supporters estimate that New Jersey’s casinos and racetracks would take in more than $1 billion annually.
Internet gambling will route through servers in the casinos and be available only to people using the Web inside New Jersey. The casinos hope to be able to connect with new players and lure them with vouchers for the free rooms and other bonuses they now offer the highest rollers.
Following a 2011 federal court decision saying that online gambling was not illegal, at least seven states have moved to enact it. Sports betting, too, would be based at New Jersey’s casinos, and at the racetracks, which have argued that they would go out of business without it, taking at least 7,000 jobs and $110 million in tax revenue. The legal hurdles to sports betting, though, are more significant.
“That’s the Big Kahuna,” said State Senator Raymond J. Lesniak, a Democrat who has been the chief proponent for both online and sports betting.
The effort to legalize sports betting has been closely watched around the country. New Jersey voters overwhelmingly approved a ballot initiative for sports betting in 2009, which Mr. Christie signed into law. The federal government, joined by professional and collegiate sports leagues, sued to block it.
The judge hearing the case has said he will deliver an opinion this week, but both sides expect it to be appealed to the United States Supreme Court regardless of the outcome. If New Jersey is successful in overturning the ban on sports betting, other states are expected to push for it.
The 1992 federal law banning sports betting, championed by Senator Bill Bradley of New Jersey, was intended to limit its expansion beyond Nevada and the three other states that had allowed it. But now, lawyers for New Jersey note that in Nevada alone, the volume of state-sponsored sports betting has increased to $2.9 billion, from $1.5 billion.
In court, sports leagues have objected that sports betting would corrupt the image of their contests. But supporters point out that the leagues themselves allow players to do advertisements for team-branded lottery cards and encourage fantasy leagues on their Web sites.
“They take this pious position; it’s completely hypocritical,” said Nicholas R. Amato, a lawyer representing the New Jersey Thoroughbred Horsemen’s Association. “We have casinos, we have racetracks, we have mobile gaming in the casinos, we have off-track betting parlors. It’s not like we’re virgins.”
In New Jersey, proponents argue that the new moves have already helped. Online betting companies are not only ready to offer games, but they have also moved to buy unwanted casinos.
Mr. Lesniak argues that the future is only bright: “This can make us the Silicon Valley for Internet gaming.”
|
|