How a North Jersey casino can save Atlantic City
AT THIS point, there's been so much hand-wringing in Atlantic City that it's surprising that casino execs and politicians aren't walking around with skeleton fingers.
Not that concerns aren't merited as the former gaming capital of the East may see as many as three of its 11 gambling dens close before the first autumn leaf changes color.
But despite the relentlessly bad news of the past seven years - which saw casino revenue sliced in half, lost to legal gaming halls in every state that surrounds it - Atlantic City and its chief (only?) industry aren't dead. On life-support, maybe, but not yet flatlining.
There is actually a way the town and its casinos can conceivably return to destination-resort prominence. In fact, elements of the plan have recently entered the public discussion, most important of which is the establishment of a casino somewhere in North Jersey.
As recently as eight years ago, the idea of a gaming hall anywhere in Jersey but Atlantic City would have been the height of folly and dismissed out of hand. After all, the northern half of the Garden State was - and remains - a crucial feeder market for A.C. So why would you take that business away?
Because the sad fact is that most of the gambling revenue that has left Absecon Island is never coming back. It's now the property of casinos in New York and Pennsylvania, which, thanks to their proximity to gamblers in the 201 area code, have glommed a big chunk of the North Jersey market. So, we have to start with this premise: that money has left Atlantic City for good and there needs to be new revenue sources.
So here's a five-step plan that could work:
* The state Legislature approves one casino in the Meadowlands, or another northern location.
* This casino must be the mother of all slot houses - say 10,000 machines, or whatever number will make it the world's largest (slots remain the financial backbone of the casino industry). Table games are fine, but the casino must primarily be a slots parlor.
* By law, ownership of this casino is assigned to a consortium of the current A.C. owner-operators. Ownership stake can be determined by annual market share: One day a year, new figures can be used to determine which company owns how much of the North Jersey casino during the subsequent 12 months.
This step is key, because to award a North Jersey license to a company that has no skin in the Atlantic City game would be blatantly unfair to the corporations that have invested hundreds of millions there. And having existing casino companies as stake-holders could lead to increased Atlantic City business through the use of player rewards cards.
Resorts Hotel-Casino, which is now part of a three-casino network overseen by the Mohegan tribe of Connecticut, appears to be reaping the benefits of its affiliation with its sister properties in Connecticut and Wilkes-Barre, Pa.
* Instead of the 8 percent state tax Atlantic City casinos pay, this casino's vig should be more in line with other states. Pennsylvania's taste, for instance, is a whopping 55 percent. Let's make this, for conversation's sake, 45 percent.
* Of that 45 percent, a to-be-determined percentage should be exclusively earmarked for two things: Underwriting dirt-cheap (as in $39 round-trip) flights from markets in the Southeast like Atlanta, Charlotte and Jacksonville that don't yet enjoy "convenience gaming," and subsidizing the kinds of major conventions that will fill hotel towers Monday through Thursday during the off-season.
Recent statements by various movers and shakers have included some of these elements, suggesting this is a realistic plan. Of course, nothing is a mortal lock, and this suggestion may ultimately not prove workable.
But the real point here is that it is too early to turn the lights out along the Boardwalk, and that it may still be possible for Atlantic City to not only survive, but thrive.
However, mere hand-wringing and lamentation over unstoppable forces are most assuredly not going to get the job done. A.C. is on the ropes yet again. It's time to start thinking outside the ring.
On Twitter: @chuckdarrow