The New Jersey Assembly approved five bills Monday night to enhance the state's casino-gambling and horse-racing industries. The measures, among other things, would create a new state-run casino tourism district in Atlantic City, revise certain gambling-industry regulations, and allow Internet casino wagering, as well as boost racehorse breeding in New Jersey.
Four of the bills go to Gov. Christie to be signed into law. A measure to establish a Casino Gaming Study Commission still needs Senate consideration.
"The casino and horse-racing industries are crucial to job creation and economic development in New Jersey," said Assemblyman John Burzichelli (D., Gloucester), who chairs the Assembly Regulatory and Oversight Committee, which crafted the bills. "We've now taken great steps toward ensuring these industries remain competitive and strong economic engines for years to come."
Two of the measures - the new tourism district, which broadens the powers and duties of the Casino Reinvestment Development Authority and transfers the Atlantic City Convention and Visitors Authority and its functions to the CRDA; and the bill deregulating the gaming industry to attract investment - are central to Christie's proposed overhaul of the troubled resort that he announced in July.
Those bills' final passage marks the first real change in more than three decades to how business is conducted in the nation's second-largest gaming market, which is reeling from the weak economy and regional competition. The resulting structure mirrors that of Nevada.
The Assembly's approval of the bills, which it amended last week, came the same day that the state Casino Control Commission released annual figures showing Atlantic City's 11 casinos with a 9.6 percent decrease in revenue last year compared with 2009. Casino revenues fell to $3.6 billion.
"We have seen continued strength in non-gaming areas, but the state of the economy and the increase in competition continued to hurt casino revenue last year," said commission chairwoman Linda Kassekert.
Atlantic City ended 2010 with a 28th consecutive monthly revenue decline. Its casinos recorded winnings of only $237.2 million in December, down 12.8 percent from December 2009. That represented the second-largest year-over-year decline for a single month last year.
The drop in revenue came despite a more favorable calendar (one extra Friday in December) and encouraging news reports about visitor volumes around New Year's Eve. But slots revenue declined 9.8 percent year-over-year, to $161.5 million last month, as table-games revenue fell 18.7 percent, to $75.7 million.
"Atlantic City continues to experience significant pressure from expanded table-game offerings at Delaware and Pennsylvania casinos," gaming analyst Dennis Farrell Jr., of Wells Fargo Securities L.L.C., said. "We remain concerned that elevated regional supply is too large to ignore and will likely offset any potential macroeconomic improvements.
"We maintain our cautious investment thesis toward the market, as we believe A.C.'s slot and table-game businesses will likely continue to see a challenging environment in 2011," Farrell said.
Pennsylvania's 10 casinos, meanwhile, posted a nearly 13 percent increase in gross slots revenue last month from a year ago, according to figures released last week by the Gaming Control Board.
Parx continued to be the state's dominant casino, as it debuted Asian table games and doubled the offerings of its new poker room last month. The Bensalem casino, which grossed $28.7 million last month, is gearing for another expansion in spring.
Table-games revenue for November, the latest month available for Pennsylvania, was about $38.5 million in the fourth straight full month that such games have been offered.
Analysts say a key indicator that Atlantic City is continuing to wobble is last week's suspension for four months of the two-year-old train line shuttling gamblers from Manhattan to Atlantic City because of low ridership. The Atlantic City Express Services train will stop running Friday and will resume May 13.
The train was started by three casinos - Caesars Atlantic City, Harrah's Resort, and the Borgata Hotel, Casino & Spa - to lure New Yorkers to the Shore, but it has never turned a profit. Train service between Philadelphia and Atlantic City will not be affected.
One way to help jump-start Atlantic City is to introduce Internet wagering at its casinos. The Assembly voted, 63-11-3, Monday to allow such an option. The Senate also approved the measure Monday, 34-2.
"The window for successful convergence between land-based and online casino entities has a limited time frame," Peter Karroll, chief executive officer of IAM Corp., an online-gaming marketing and management firm, said after the Assembly vote. "The casinos that invested early to become online brands would have a much higher chance of success.
"Atlantic City needs the help in a big way," Karroll said, "and the timing is perfect for that state, as some forward thinking and action will push New Jersey casinos to the front of the online convergence window, and, quite possibly, bring new life, employment, revenues, and vitality back to the Eastern Seaboard casino business."
Sen. James Whelan (D., Atlantic), who sponsored several of the measures in the Senate and cochaired the Legislative Gaming Summit last year, said: "With the final legislative approval on these bills today, we're taking a stand against the decay and stagnation of the casino industry and hoping to turn around years of neglect."