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    Saturday, May 11, 2024

    For state's casinos, another competitive threat: northern New Jersey

    Add northern New Jersey to the list of places that could do southeastern Connecticut’s casinos harm.

    Lawmakers in the Garden State are considering a bill proposing a constitutional amendment that would allow two big casinos outside Atlantic City, which, for 40 years, has been the state’s only gambling haven.

    If the bill passes — and Gov. Chris Christie signs it into law — voters will be asked to approve the amendment in an Election Day referendum in November.

    The amendment would allow one casino in each of two northern counties “in a town that is at least 72 miles from Atlantic City.”

    One of the potential sites, in Bergen County, is the Meadowlands Sports Complex in East Rutherford, which includes MetLife Stadium, long familiar to Connecticut fans as the home of the New York Giants and New York Jets of the NFL.

    A billion-dollar casino at the Meadowlands would take business away from Foxwoods Resort Casino and Mohegan Sun, which are facing more immediate threats, a leading gaming expert said Thursday.

    “Northern New Jersey would be a direct competitor for New York (City) traffic,” said Clyde Barrow, manager of Massachusetts-based Pyramid Associates’ Northeast Gaming Research Project. “Unquestionably, a casino at the Meadowlands will generate lots of revenue, expanding the market at the expense of existing facilities.”

    New Yorkers account for about 20 percent of Mohegan Sun’s patronage and about 10 percent of Foxwoods’ customers, said Barrow, chairman of the Department of Political Science at the University of Texas Rio Grande Valley.

    The Connecticut casinos’ owners, the Mohegan and Mashantucket Pequot tribes, hired Barrow early last year to analyze the impact of casino projects that had been approved in Massachusetts and upstate New York.

    At the time, the Connecticut legislature was considering a bill that would have allowed the tribes to jointly pursue up to three “satellite” casinos in strategic locations in Connecticut.

    Barrow found that casinos planned in Springfield and Everett, Mass., and in Schenectady and Thompson, N.Y., would devastate business at the Connecticut casinos, causing them to lay off thousands of employees.

    Casinos in northern New Jersey would only makes things worse, he said Thursday.

    Eventually, Connecticut lawmakers passed a bill authorizing the tribes to seek proposals for a single satellite casino in the Hartford area, where it would compete against MGM Resorts International’s $950 million project in Springfield, Mass.

    The tribes again turned to Barrow to analyze the responses they received to their request for proposals.

    Barrow said he has completed his “market analysis” of each of five proposed sites’ ability to “recapture” revenues that would be lost to the Springfield casino as well as their impact on the “mother ships,” Mohegan Sun and Foxwoods.

    He was not at liberty to discuss his findings.

    “When Connecticut started talking about satellite casinos, there were going to be three of them, with one in southwestern Connecticut. Maybe this (a possible Meadowlands casino) could restart that debate,” Barrow said.

    The bill before the New Jersey Senate calls for applicants for a casino license to commit to an investment of at least $1 billion.

    Initially, eligibility for the licenses would be limited to operators of Atlantic City’s existing casinos.

    But if no Atlantic City operator submits an application within 60 days, any operator could apply. Reportedly, Steve Wynn, the Las Vegas gaming mogul, is interested in pursuing a northern New Jersey casino.

    Under the legislation, some revenue from the new casinos would be diverted to Atlantic City, which is struggling in the wake of casino failures. Four Atlantic City casinos closed in 2014, leaving eight operating.

    Barrow said the authorization of northern New Jersey casinos would “almost guarantee that at least one or two more casinos in Atlantic City will go under.”

    The Mohegan Tribal Gaming Authority, which operates Mohegan Sun, has managed Atlantic City’s Resorts Casino Hotel since 2012, overseeing something of a revival in its fortunes. The authority also has an ownership stake in the property.

    Bobby Soper, the authority’s president and chief executive officer, took a dim view of proposed casino expansion in New Jersey.

    “The addition of North Jersey casinos will further exacerbate economic challenges facing Atlantic City casinos,” Soper said in an email. “The Atlantic City market is finally seeing signs of stabilization; in fact, gross operating profits realized by the remaining casino operators have increased by 41 percent year over year for the nine months ending Sept. 30, 2015. Resorts Casino Hotel has seen net revenue increase 12.7 percent through September 2015 to $118.4 million, and we hope to continue this trend.

    “Introducing additional gaming supply in New Jersey is simply not the solution.”

    b.hallenbeck@theday.com

    Twitter: @bjhallenbeck

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