By Heather Haddon Wall Street Journal
Even with Atlantic City casinos struggling, New Jersey officials may ask voters to expand gambling to the northern part of the state—and some companies are ready with ambitious plans to get a piece of the action.
Hard Rock International and the Meadowlands Racetrack are set to unveil plans for a casino Wednesday that would be just west of New York City and next to MetLifeStadium, which draws hundreds of thousands of fans across the Hudson River to watch the New York Giants and New York Jets.
Plans for a $4 billion casino complex adjacent to Liberty National Golf Course on the waterfront in Jersey City are also in the works. Billionaire investor Paul Fireman is proposing a high-end resort featuring a 90-story hotel, 14 restaurants, a theater and a complex of pools on a 200-acre site that would be linked to New York City by ferry service, people familiar with the plan said.
While developers are armed with blueprints, lawmakers in Trenton remain divided on whether—and how quickly—a referendum should be placed before voters to authorize the largest expansion of gambling in the state since a 1976 vote legalized casinos in Atlantic City.
Some elected officials are pushing for a vote this November, while others are calling for one in November 2016, when voter turnout is expected to be much higher because of the presidential election. The fight has exposed regional fault-lines that transcend party, with at least one South Jersey Republican voicing rare public criticism of Gov. Chris Christie.
Mr. Christie, a Republican who has committed to bolstering Atlantic City’s flagging casino industry, has endorsed expanding gambling immediately elsewhere in the state if some of the tax revenue generated by additional venues helped the struggling seaside resort.
“I certainly would be publicly supportive of getting this question done as soon as possible,” Mr. Christie said when asked about North Jersey casinos on his monthly radio show last week.
On Monday, three northern New Jersey Democrats unveiled a resolution to put the gambling expansion before voters.
“It’s time to stop talking and listening,” said Assemblywoman Valerie Vainieri Huttle, a Bergen County Democrat supporting the resolution. “More and more dollars are going into New York and Pennsylvania, but New Jersey is still suffering.”
As proposed, the ballot question would ask voters whether the state Constitution should be amended to allow for up to three casinos in Bergen, Essex or Hudson counties.
A portion of the taxes collected from the casino revenue would go to fund programs for the elderly and disabled, along with a dedicated allotment to help Atlantic City develop visitor attractions beyond gambling.
If approved by voters, lawmakers then would pass legislation to authorize the expansion and hammer out the details. The amendment doesn’t specify how much the casinos would be taxed, but the operator of the Meadowlands Racetrack has floated a levy of 55% as part of its plan. Atlantic City now imposes an 8% tax on gambling proceeds.
To be placed on the ballot, three-fifths of lawmakers in both chambers would have to support it by Aug. 3. But with a summer recess looming, proponents said they need to get moving this month on convincing lawmakers to go forward with the referendum this year.
Many lawmakers in South Jersey are in no rush, saying the impact of new casinos on Atlantic City’s economy could be devastating.
“Casinos in North Jersey are a bad idea, and I disagree with both Gov. Christie and the Democrats who control both the Senate and Assembly on this issue,” Assemblyman Sam Fiocchi, a Republican who represents South Jersey, said in a statement.
Senate President Steve Sweeney, the Legislature’s ranking Democrat who represents South Jersey, has said he supports North Jersey casinos but favors putting a referendum before voters next year. It takes time to build support and turnout will be higher during the presidential election, his aides said.
Allowing for two casinos in northern New Jersey could generate more than $500 million in gambling revenue, according to an analysis by Deutsche Bank. The casinos would be particularly lucrative given their proximity to New York City and some 13 million people with a median household income above $65,000, the analysis said.
In Atlantic City, gambling revenue has continued to plummet, falling to $2.74 billion last year from a peak of $5.2 billion in 2006. Four Atlantic City casinos closed last year.
With the specter of New Jersey gambling expanding, potential operators have jockeyed behind the scenes in Trenton to amass support for their proposals and have drawn up elaborate plans.
Officials connected to the Meadowlands casino declined to comment in advance of Wednesday’s announcement. Karen Kessler, a spokeswoman for MetLife Stadium, said officials “were disappointed that we were not briefed in advance.”
Developers of the Liberty Rising project have continued to refine the plans since elements were first made public last year. It no longer features a Ferris wheel that was billed as the largest in the world at the time, the people said. The number of hotel rooms has been reduced to about 1,500 from the 3,000 originally proposed, and a racetrack has been eliminated, the people said.
The Liberty Rising proposal is projected to generate at least $1.5 billion in gambling revenue a year and create 6,000 permanent jobs. Unlike the Meadowlands plan, its backers are looking to pay the current 8% casino tax along with an additional 5% to set aside in a fund to benefit Atlantic City and other projects.
Mr. Christie said he doesn’t favor any single proposal, and would want to see details of all of them before offering his opinion.
Write to Heather Haddon at [email protected]