Boardwalk Empire Battles Racinos

The issue of New Jersey “racinos” threatens to cause a north/south state divide as legislators hear from the state’s horse racing and gaming interests in the debate whether to end a $30 million annual subsidy to racetracks if they decide to install slot machines or video lottery terminals.

Gov. Chris Christie endorsed proposals to allow casinos to instead keep the $30 million subsidy they pay to tracks in exchange for keeping slot machines out, believing they hurt gaming in Atlantic City.

He also endorsed recommendations that call for closing or selling the state-owned and struggling Meadowlands Racetrack and selling the underutilized Izod Center. He is considering a state takeover of services in Atlantic City’s casino district because of the city’s long history of corruption and failure to deal with blight and declining revenues.

Hearings Sept. 10 at the Meadowlands reportedly failed to reach any consensus. Opponents of racinos believe allowing gaming in the north end of the state will siphon dollars from Atlantic City, while proponents argue they help keep those dollars from leaving the state entirely.

“Our alternate gaming proposals have never been about hurting Atlantic City,” said Tom Luchento, president of the Standardbred Breeders and Owners Association, who testified at the hearing. “We have suggested that the casino owners have the chance to benefit from slots at the Meadowlands as operators and with the cross-promotional opportunities that will help their revival as a destination resort.”

The down economy has hit both horse racing and casino revenues, though racetracks were hit first by competition from the state Lottery and, ironically, the casinos. But declining attendance has eroded profits for all three interests.

Revenue reports released Sept. 10 show Atlantic City casino revenue was down 11.3 percent in August, the first full month of competition against table games in Pennsylvania. Slot parlors there have been siphoning off Atlantic City revenue for nearly four years.

“It’s not us against you or South against North,” New Jersey Senate President Steve Sweeney said at the Sept. 10 hearing. “It’s about how we help the whole state.”

There will be a final hearing in late September at Monmouth Park racetrack. Christie’s proposals require state legislative approval before they can be enacted.