Atlantic City's woes likely to doom N.J. casino expansion

Interest groups have waged a record-setting spending battle over a New Jersey ballot question on whether to expand casino gaming to North Jersey.

One side of the fight, however, is bracing for defeat Nov. 8.

"We couldn't overcome [the opposition's] argument that you couldn't trust Trenton," said Jeff Gural, a New York developer whose group has suspended its paid media campaign backing the ballot question.

Supporters and opponents of the question, which asks voters to allow two casinos in the northern part of the state, have spent $21 million - a record for a state ballot question, according to state election law officials.

But pollsters say one factor is likely to decide the question's fate.

"It really all hearkens back to Atlantic City," said Ashley Koning, interim director of the Eagleton Center for Public Interest Polling at Rutgers University. Voters "see what's going on in Atlantic City, and they fear it's going to happen again."

In a September Rutgers-Eagleton poll, 50 percent of voters said casino gambling should be limited to Atlantic City, while 40 percent said it should be permitted elsewhere in the state. Earlier this year, 44 percent had said casino gambling should be permitted elsewhere.

The center followed up after the September poll with respondents opposed to expanding gambling, and Atlantic City was the main reason, Koning said.

Crippled by debt following four casino closures in 2014, the Shore resort faces the prospect of a state takeover.

Gural, who operates the Meadowlands Racetrack and has proposed a casino there, acknowledged that Atlantic City's troubles complicated the case for more casinos, which supporters say would allow New Jersey to compete with neighboring states for gambling dollars.

They also say the new casinos - two of which would be permitted, in separate counties and in towns at least 72 miles from Atlantic City - would help save the beleaguered city.

In addition to money for programs for seniors and disabled residents, the state's share of revenue would go toward "the recovery, stabilization, or improvement of Atlantic City," the statement accompanying the ballot question tells voters. It adds that "lesser portions" would go to thoroughbred and standardbred horsemen.

Opponents say those benefits are unclear. While proponents say as much as $500 million in new revenue could be brought into the state annually, no law has been passed specifying the tax rates.

"It makes the entire thing hypothetical speculation, at best," Gordon MacInnes, president of the left-leaning New Jersey Policy Perspective think tank, recently told reporters.

Expanded gaming opponents - who include Atlantic City lawmakers - also say it would further hurt the casino industry there. Fitch Ratings has predicted that expanding gaming in New Jersey could result in as many as four more casino closures in Atlantic City, while noting that additional revenue from the new North Jersey casinos could help offset the tax revenue lost.

"We'd essentially be cannibalizing Atlantic City," said Assemblyman Chris Brown (R., Atlantic), joining MacInnes in opposing the measure.

Proponents argue there isn't a good alternative. "What's going to bail out Atlantic City?" asked Assemblyman Ralph Caputo (D., Essex), who has backed more casinos. The proposed revenue sharing "was a way to tie north to south."

Caputo said he was "not giving up." Still, "I wish we would have had a stronger 'yes' campaign."

The "no" campaign has been led by Trenton's Bad Bet, funded by companies with casinos in New York. It had spent $11.3 million through Oct. 11, according to the state Election Law Enforcement Commission.

Our Turn NJ, the group backed by Gural and Reebok founder Paul Fireman, who has pitched a casino in Jersey City, had spent $8.4 million. The group announced the end of its paid media campaign in September.

Internal polling showed that Our Turn NJ couldn't persuade voters, "even when we said to people, this campaign is being paid for by the New York casinos, who obviously have a vested interest in keeping your money in New York," Gural said.

Top contributors to Trenton's Bad Bet include Genting New York LLC, part of the Genting Group of Malaysia, which has given $6.1 million, and Empire Resorts Inc., of Monticello, N.Y., which has given nearly $2 million, according to filings. JEMB Realty, a partner in Resorts Casino-Hotel in Atlantic City, contributed $1.2 million.

Trenton's Bad Bet didn't respond to a request for comment. In a statement on its website, the group, which describes itself as a "diverse collection of concerned New Jersey community leaders, unions, businesses and residents," said it was "taking nothing for granted in the final weeks leading up to the November vote."

A television ad the group said it began airing last week in the New York market argues that the ballot measure would lead to lost jobs, cuts to services, and increased taxes.

"Don't let Trenton politicians stick us with another bad deal and another broken promise. We can't afford it," the ad says.

"The fact is that the politicians in Trenton never responded to those attacks," Gural said, adding that he thinks the ongoing George Washington Bridge lane-closure trial didn't help public confidence.

As for voters who don't trust Trenton politicians, Gov. Christie has argued they should approve the second question on the ballot.

With the state's first gas tax increase since 1988 about to go into effect - at 23 cents per gallon - the governor and lawmakers want voters to constitutionally dedicate the new revenues to the state's Transportation Trust Fund, ensuring the money isn't diverted to the state's general budget.

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Staff writer Jacqueline L. Urgo contributed to this article.