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AFTER VOTERS REJECT NORTH JERSEY CASINOS, LAWMAKERS PUSH GAMING AT RACE TRACKS

-- Ryan Hutchins, NJBIZ

TRENTON, NJ -- December 6, 2016 -- A month after voters overwhelmingly rejected a ballot measure that would have allowed casinos in North Jersey, state lawmakers quietly advanced legislation on Monday that could achieve a similar result — without amending the state constitution or holding another election.

The new proposal (A4255) came as a surprise to some who fought the effort to end Atlantic City’s monopoly on casino gaming in New Jersey, and it has the potential to quickly become the next big legislative fight in Trenton should Democratic leadership take up the issue.

Under the bill, which cleared the Assembly gaming committee, 4-3, on Monday, Monmouth Park and the Meadowlands Racetrack could partner with existing Atlantic City casinos to create what supporters described as “internet cafes” offering online gambling.

“The racetrack, in effect, would be leasing the casinos some floor space at the race track. It would be in a designated area,” Dennis Drazin, who represents Monmouth Park, told committee members. He said he envisions “nice, upscale” areas where there would be “an environment of camaraderie.”

New Jersey already allows internet betting — whether on a computer at home or an iPhone on the go — so the legislation appeared at first to be mundane. But its language is so simple that there would be nothing preventing the casinos from installing computers that look and act like slot machines, and offering just one game on each terminal.

Democratic Assemblyman Vince Mazzeo, who sits on the committee and represents parts of Atlantic County, said he came into the hearing expecting something totally different.

“This intent was not what we thought when we came here,” he said after the meeting. “And now that you read into the bill and heard the testimony, there’s something up here. Something doesn’t smell right.”

If enacted as written, New Jersey could potentially create the sort of “racino” operations that dot New York State and became a multi-billion-dollar industry after starting with simple “video lottery terminals.” The operators of two such facilities, in Queens and Yonkers, poured millions of dollars into an advertising campaign to defeat the North Jersey casino measure that was on the ballot last month.

Confronted with that possibility, Assemblyman Ralph Caputo, chairman of the committee and a sponsor of the legislation, said that very well may happen.

“Well, you know what? This is how the world turns,” Caputo, who sponsored the North Jersey gaming amendment, said after the meeting. “I guess we’re going to have gaming at the tracks.”

The ballot question voters rejected last month would have allowed two resorts to be built at least 72 miles from Atlantic City, each costing at least $1 billion and offering a mix of slot machines and table games. Meadowlands Racetrack owner Jeff Gural was among the most likely developers of a new casino. Monmouth Park wouldn’t have qualified because of the distance restrictions.

Because the amendment failed, lawmakers are prohibited from placing the same question — or a similar one — on the ballot again for several years. Nearly 80 percent of voters opposed the measure.

Caputo dismissed the idea the new legislation, also sponsored by Assemblyman Ron Dancer, would violate the will of the voters. He said it was another way to “win.”

“Once we get that momentum, maybe we can win this time,” he said with a chuckle. “This is another way of winning, isn’t it?”

It’s unclear if the legislation will advance to a vote in the full Assembly, and it’s unlikely to be taken up in its current form in the Senate.

A spokesman for Assembly Speaker Vincent Prieto said Monday afternoon that no decision had been made about whether the legislation would be posted for a vote on the floor. But Prieto issued a statement in which he didn’t rule it out.

“Online gaming is a reality, and with that in mind, this is a discussion worth having as we consider the future of gaming in New Jersey,” Prieto said. “I’ll continue listen to all sides as we move forward before making any decision.”

The proposal is far less likely to get the same showing in the upper house, where Senate President Stephen Sweeney — a South Jersey Democrat — could raise concerns about allowing gaming at Monmouth Park given its proximity to Atlantic City.

“There’s a reason why we haven’t done them. And one of the reasons was that putting racinos so close to Atlantic City would devastate Atlantic City,” Sweeney said after an unrelated event in the statehouse Monday.

Asked if he’d support similar legislation that was limited to the Meadowlands, he said, “I’m open to look at it.”

“I haven’t even been approached about any of these bills yet,” Sweeney said. “But I’ll look at them.”

Gov. Chris Christie's office did not respond a request for comment.

The proposal seemed to catch many off guard.

Just a handful of people were still in attendance when the gaming committee voted on Monday. Republican Assemblyman Chris A. Brown, who represents the same area as Mazzeo and spent much of the last year fighting proposals to expand casino gaming, left a “yes” vote and departed the meeting early.

He said later in the day that his vote was mistake and that he had changed it to a “no.”

“It was a miscommunication,” he said. “Right now, everyone’s focus should be on stabilizing Atlantic City and diversifying its market so that we get to the point where competitive gaming doesn’t deleteriously affect the state as a whole. To siphon off gamblers from the casinos would do more harm than good to the overall state revenue.”

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