Vol. 4, No. 5, May 2007
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Wise Governance
Protecting the state’s welfare means protecting our industry
Governor Jon Corzine has made it clear he understands the successes of our industry as well as the challenges facing Atlantic City.
After last year's budget fight caused a casino shutdown at the height of our summer season, Governor Corzine spoke directly to the employees and other stakeholders of our industry and summarized his thoughts by simply stating: “We need to protect Atlantic City.” Clearly, he values our industry as an economic generator for the entire state.
The Casino Association of New Jersey appreciates the governor's commitment as well as his demonstrated concern through the efforts of Gary Rose, chief of the Office of Economic Growth, and of Diane Legreide, the newly appointed director of Atlantic City Projects. These proven leaders have the acumen and talent to recognize that the state’s success is directly tied to our success.
Both Governor Corzine and Gary Rose share backgrounds as senior executives with Goldman Sachs. They fully understand the intricacies of the financial world, which is so critical to the continuing success of Atlantic City. Legreide—as a former Casino Control Commissioner and with her various other leadership roles—understands it as well.
This leadership team already knows that our industry generates more than $1 billion annually in direct taxes and fees, and that our 45,000 employees, plus thousands more whom we employ indirectly, contribute mightily to the state’s economy. This team does not need to be told about the billions of capital investment that our companies have made over the years, much of it within the past four years, and with many more billions of investment poised to be made in the near future. And they already have seen the numbers that show we spend about $2 billion annually buying goods and services from other New Jersey businesses, large and small.
CANJ trusts that Governor Corzine will continue to maintain an environment in which Atlantic City can thrive and grow, and that he assumes a leadership role on the significant issues facing our industry such as:
• Slots at the Meadowlands;
• The passage of legislation preventing future casino shutdown;
• Maintaining the stable economic and political environment that assures our continued growth.
Approving slots at the Meadowlands would send a message to Wall Street that the rules have changed in New Jersey, creating a less stable investment climate. Less stability equals increased risk, which raises the cost of capital, negatively impacting future development projects in Atlantic City.
The governor was right when he stated the potential state revenue involved is probably not worth the risk to potentially greater investments in Atlantic City casinos. We agree. We do not believe that slots in the Meadowlands would raise nearly the amount of money proponents suggest, and they would inevitably cannibalize much of the revenue already being generated by Atlantic City. The impact on Atlantic City of slots at the Meadowlands would be declining revenue, limited growth opportunities, and fewer jobs in one of the state’s fastest-growing, most vibrant economic sectors.
This would lead to a decline in overall gaming tax revenue as well as other industry-related direct taxes and fees. Gaming revenues would decline in Atlantic City as a consequence of competition from within the state. This means less money would be available to help New Jersey’s senior citizens and the disabled who benefit from the prescription drug program funded by these revenues.
We urge the governor to support legislation preventing another state shutdown from closing our casinos again. Clearly, it makes no sense for a state that is in a fiscal crisis to close an industry that generates $1.5 million per day in tax revenue and fully funds those state employees whose jobs were suspended during that shutdown.
Moreover, the casino closing, during the most important week of the summer season, resulted in extreme hardships for thousands of casino workers, who lost millions of dollars in salaries and tips they will never recoup. As tourists make their plans for the upcoming Fourth of July holiday, there must be solid assurance that there will not be another casino closure. We need a stable economic and political climate so that Wall Street and gaming companies continue to see Atlantic City as a rock-solid investment. This type of development will help the state meet a wide range of economic development objectives: tax revenues, job creation and capital investment. That is also the best strategy to compete against emerging jurisdictions such as Pennsylvania and New York.
We are hopeful that the governor will look at all of these issues as both a governor and as an experienced leader on Wall Street, and that he will work hard to maintain a stable investment climate so New Jersey can continue to reap the rewards of turning Atlantic City into a world-class destination resort.
