Atlantic City’s winning formula

Is anyone surprised that New Jersey’s efforts to revitalize Atlantic City are failing?

The news that AC’s latest hope for revival, Revel, is on the verge of bankruptcy and foreclosure is no shock.   As Trump’s multiple bankruptcies over the years demonstrated, casino lenders are the biggest losers, next to bussed in seniors lured by a free roll of quarters, in AC.

Vice has always been the key to Atlantic City’s economic viability.  For good reason.  The place is a dump.  You have to drive through a swamp to get there.   It is very inconvenient.  The lure of doing something enjoyable that is forbidden elsewhere has been the key to Atlantic City’s economy since the days of Nucky Thompson.

Now that legalized gambling is available in more convenient places and liquor is legal most everywhere, Atlantic City is doomed, unless it comes up with a new vice to make available.

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Exodus of Perretti Farms Stallions Creates Challenge for New Jersey’s Horse Racing Future

MANALAPAN,  NJ – November 30, 2012 — The loss of New Jersey stallions to slots-enriched  programs in other states is now a reality.

Perretti  Farms in Cream Ridge, NJ has announced that it has moved two of the harness  racing industry’s premier stallions to Pennsylvania for the 2013 breeding  season.

Muscles  Yankee and Rocknroll Hanover will be relocated from Perretti’s 1,000 acres of  prime farmland in Upper Freehold Township across the state line to Newtown, PA  to take advantage of the casino-enriched purses in Pennsylvania, especially the  Pennsylvania Sire Stakes program.

The  New Jersey Sire Stakes program, which for three decades was the model for other  states and provinces, is now one of the weakest because of the paucity of purse  money.

New  Jersey is no longer competitive, putting more than 170,000 acres of equine  farmland in jeopardy,” said Standardbred Breeders & Owners Association  President Tom Luchento.  “Without a healthy breeding program, the stallions  and broodmares will move – have moved — to adjoining states where they are  flushed with the cash from casinos and racinos [racetracks with casino-style  wagering].

“Not  only is the preservation of farmland at stake, but also more than 10,000 jobs  currently filled by tax-paying residents who are ill-equipped to change careers  and will end up on welfare rolls,” Luchento added.

Trenton  continues to focus on ways to improve Atlantic City and other businesses which  provide fewer jobs, while the horseracing industry gets pushed aside,” Luchento  said.  “They have tried to Band-Aid the problem with a few short term  solutions.  Meanwhile, the wound continues to grow, and the decision by  Perretti Farms is a pure product of that injury.

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Oceanport Councilman Joe Irace’s remarks to the Assembly Regulartory Oversight and Gaming Committee, July 19, 2012

Chairman Ramos, and members of the Assembly Regulatory Oversight and Gaming Committee, thank you for inviting me to speak before you today on this

important topic. I am Oceanport Councilman Joseph Irace.

When the State of New Jersey voted to allow casino gambling in Atlantic City in 1976, it marked the dawn of an era wherein, for close to a decade and a half, New Jersey had a de facto monopoly on casino gambling on the East Coast.  That era ended in 1992 with the advent of  Foxwoods Resort Casino.  In the years since then, we have seen a steady encroachment upon Atlantic City’s position as the premier East Coast destination for casino type gambling.  New York, Connecticut, Delaware, West Virginia, Pennsylvania and Maryland now offer substantial gaming options to the general public. Indeed, as of April of 2012, Pennsylvania’s gaming industry was second only to that of Las Vegas. Quite clearly, the landscape has changed immeasurably since 1976 and New Jersey’s stranglehold on the East Coast gaming industry is no more.  This isn’t an Atlantic City gaming industry problem, it is a New Jersey business development and retention problem.

Similarly, three decades ago, the State of New Jersey was a pre-eminent player in the horseracing industry.  The Meadowlands, Freehold Raceway, Monmouth Park, Atlantic City Race Course and Garden State Park — the latter three called the “Golden Triangle” of New Jersey racing — all offered top notch, stakes level horse racing at quality venues.  As we are all aware, the New Jersey horseracing industry has suffered setbacks over the past few decades and the root of these setbacks can be traced to the same source as that which has negatively impacted on Atlantic City.  New York, Pennsylvania, Delaware and West Virginia have all committed to the Racino business model and this has placed the State of New Jersey’s horseracing industry at a decided disadvantage.  Again, this isn’t a horseracing industry problem, it is a New Jersey business development and retention problem.

For far too long now, New Jersey’s gaming industry and New Jersey’s horse racing industry circled each other warily as opponents.  It is high time that they stop viewing each other as competitors and start viewing themselves as comrades at arms with a singular purpose: melding both industries in such a fashion that New Jersey once again becomes the East Coast’s premier gaming AND horse racing destination.  Based on the revenues generated by Racinos in the surrounding states and across the nation, the question of whether or not these two industries can co-exist, and indeed THRIVE, is no longer arguable.  Quite simply, if New Jersey’s gaming and horse-racing industries fail to embrace this new business model, both will perish and the State of New Jersey will be lesser for it.

Our elected officials and both industries need to stop thinking parochially and start thinking globally.  The infrastructure, manpower and talent are already in place.  We just need the desire and commitment to get this done, and get it done sooner rather than later.  The State of New Jersey has waited long enough to get its act together.  The states that have already embraced the Racino business model have demonstrated that what is good for the horseracing industry is good for the gaming industry and vice versa.  More importantly, what’s good for those industries is also good for all of New Jersey. 

I implore our legislators to make every effort to convince these two parties that it is imperative that they stop competing with each other and start complementing each other in order to re-capture the hearts, minds and loyalty of their consumers. If the gaming and horse racing industries fail to adapt to the new paradigm, neither will survive.  And that won’t be a gaming or horse racing problem — that will be a tragedy for the State of New Jersey.

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Suckers Bet or Sure Thing? Give The Meadowlands A Slot

By Joe Irace, Oceanport Councilman

The latest Atlantic City Rescue Plan by the State of New Jersey for all intents and purposes,  ensures a slow and painful death by a thousand cuts to New Jersey’s horse racing industry all so that our elected officials in Trenton are both blinded and mesmerized by the bright shiny lights of Atlantic City.  The political machine is fond of trumpeting the tired old canard that New Jersey’s racing industry is dying.  They tell this big lie over and over again in the hope that by sheer repetition it will become the truth, all the while purposely ignoring the politically inconvenient fact that Atlantic City’s gambling industry is not dying, but is actually dead and has been so for quite some time. 

This proposed plan ignores the most obvious socially and fiscally responsible solution: allowing for the installation of video lottery terminals, slot machines or a gaming casino at the Meadowlands. 

Why does the State continue to ignore this solution?  Because a great number of our unelected officials, entrenched bureaucrats and political power brokers in Trenton, rather than deal with the realities attendant to the success of the introduction of video lottery terminals or casinos at racetracks in Maryland, Delaware, Pennsylvania and New York, have decided that the State of New Jersey is going to get into the business of subsidizing the failed business model that is Atlantic City.  Some of the most shrewd and brilliant businessmen in the world couldn’t sustain the Atlantic City business model, yet Trenton’s powers that be are supremely confident that they are up to the task, the rest of the State of New Jersey be damned. And, quite frankly, why shouldn’t they be confident what with the tremendous success they’ve had over the past two decades with the revitalization of Camden, Newark and Paterson, the Xanadu Project, the School Construction Corporation,  Abbott Districts, pension funding, budget balancing and the recent Race to the Top Application?

As evidenced by the success of gaming sites in Connecticut, Delaware, New York and Pennsylvania, the residents of the tri-state area are more than willing to forego the bucolic vistas offered by a ride down the N.J. Turnpike and Garden State Parkway and the urban “charm” of Atlantic City in favor of more convenient gambling venues. Notwithstanding the fact that the two most interested parties, the horsemen and the general public, are clamoring for a casino at the Meadowlands facility, the State dismisses the idea out of hand in favor of a proposal that provides neither party with what it wants.

 Two reports by Christiansen Capital Advisors, commissioned by the New Jersey Department of Treasury, recommended the installation of slot machines at the Meadowlands. The reports stated that 5,000 machines at the Meadowlands would produce $750 million annually and that 10,000 machines would produce $1.5 billion annually. The same study suggested that 2,100 slots at the Meadowlands would reduce Atlantic City gross gaming revenue by .01 percent. 

Senator Sean Kean recently said on the New Jersey Senate floor “if it (a Racino at the Meadowlands) were put to a vote we’d probably get a majority, if not a super-majority (in support), to save horse racing in the state of New Jersey.”  Despite the overwhelming financial benefits flowing from such an arrangement, Trenton summarily dismisses the installation of Video Lottery Terminals, slot machines or a gaming casino in the Meadowlands in what can only be interpreted as a yet another deferential bow to Atlantic City’s political power brokers.

Given the fact that over the past decade or so New York, Connecticut, Pennsylvania and Delaware have destroyed Atlantic City’s monopoly on East Coast gaming, one would think that our friends in Trenton would have enough sense to fight fire with fire and move quickly towards the racino business model.  Unless, of course, maybe our Atlantic City-centric friends from Trenton don’t want to move quickly because if they wait long enough for the racing industry to finally die, then they won’t have to share profits with anybody.  How much would you like to wager that, after years of categorically denying the financial benefits of allowing gambling outside of Atlantic City, our friends in Trenton will have a sudden about face on the issue once the horsemen have been forced from the Meadowlands?

Trenton refuses to acknowledge the viability of the racino model and, instead, continues to dump on our horse racing industry and the 7,000 jobs, $110 million in federal, state and local taxes, and 57,000 acres of working agricultural landscape which come along with it. Racinos around the country employ nearly 30,000 people. Bringing racinos to New Jersey will create thousands of new jobs. Additionally, it will solidify many jobs that may be in danger of leaving our state in favor of states that have already authorized racino legsilation. Racinos are a proven model that states around the country are turning to for gaming. Twelve states have already implemented racinos and many more are debating proposals to allow them in the near future. In 2009, racinos around the country generated $2.6 billion dollars in tax revenue for state and local governments. Additionally, they strengthen the state’s agricultural industry. Racinos allow existing racetracks to grow their purses, spurring new investments in breeding racehorse ownership throughout the state. Additional racehorses will create more jobs and improve the overall economic impact. As Delaware, Pennsylvania, New York and the nine other racino states can attest – racinos improve the rural economy.  But the health and well being of our state’s rural economy does not seem to be of paramount importance to the movers and shakers in Trenton.  Why should they spend a few million dollars to shore up and promote a proven, historically viable and stable commodity like horseracing, when instead they can throw HUNDREDS of millions of taxpayer money at a financial and social corpse like Atlantic City?

Racinos are a sure thing.  Rushing with reckless financial abandon into the resurrection of Atlantic City is a sucker’s bet.  Sure thing. Sucker’s bet. Sure thing. Suckers bet.  Which one will our friends in Trenton take? If left to their own devices, I think we all know that our friends in Trenton will take the sucker’s bet every time.  And since our friends in Trenton will be spending our tax dollars trying to raise the corpse that is Atlantic City and its gaming industry, we, the taxpayers, are the suckers. And we really are suckers if we let them do this without giving them a fight. I say that we bring the fight to them. Let’s do everything we can to get this matter to a vote of the New Jersey Legislature as soon as possible!

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