New Jersey’s twin legislative chambers approved a referendum on a constitutional amendment to end Atlantic City’s gambling monopoly and allow two new casinos in the state’s north close to New York city. Atlantic City itself, meanwhile, edged closer to government shutdown amid an impasse over the city’s finances, with state governor Chris Christie warning opponents “not to play chicken.”
The state referendum will be held in November. Proponents of the new casinos say they will increase New Jersey’s overall gaming tax revenues, with up to one third of contributions to be made available for Atlantic City’s regeneration. Yet critics complain the specifics of the new arrangement will not be legislated on until after the ballot. These details include specifying the tax rate levied on the new gambling halls (perhaps as much as 50% of gross gaming revenue, compared to 9.25% now paid in Atlantic City), together with who will pay for their necessary infrastructure. A Rutgers- Eagleton poll showed only 44% of New Jersey residents would vote yes, with 49% saying they oppose casino expansion.
In the nearer term, Atlantic City will have to shut down nonessential services if the state does not provide it with a loan before mid-April. Mayor Don Guardian has been pushing for an aid package with measures to extract more tax from Atlantic City’s casinos. Without it he says the city will be forced into bankruptcy, which analysts say could hurt the credit ratings of municipalities across the state. Christie says he will not support the package without a state takeover of Atlantic City’s finances, allowing Trenton to sell off city assets and break contracts with public sector unions. “I will not permit politicians in the state to blackmail the people and taxpayers of New Jersey,” he said, pointing out that Atlantic City’s government spending is nearly three times that of New Jersey’s biggest city Newark.
Atlantic City’s gambling industry collapsed after states neighboring New Jersey allowed casinos of their own, starting with Pennsylvania in 2006. Since then the resort town’s annual casino revenue has fallen from $5.2 billion to $2.5 billion. In 2014 alone, four of its 12 casinos closed, and last year Atlantic City’s housing foreclosure rate was the highest in the country.
