New Jersey lawmakers push state casino gambling expansion

By Hilary Russ

NEW YORK (Reuters) - New Jersey lawmakers advanced separate pieces of legislation on Thursday that would expand casinos beyond Atlantic City, the state's struggling gambling hub.

The bills would ask voters in November to approve a state constitutional amendment allowing casinos in two northern New Jersey counties, far closer to New York City's millions of residents than Atlantic City, which is about 120 miles away.

Different versions of the proposal cleared committees in the state Senate and Assembly and must now be reconciled, or one of them could move ahead instead.

Under the Assembly measure, about a third of the new casinos' gaming tax revenues would be funneled to Atlantic City for the first 15 years. Over the following decade, the portion going to Atlantic City would decrease until it bottoms out at 20 percent, where it would remain.

Even so, Atlantic City Mayor Don Guardian has said that expanding gambling in the state would ultimately be "devastating" for his financially distressed city.

The market is already oversaturated, with 19 casinos currently surrounding New Jersey and four more proposed, he said last week when the expansion proposals began to gain traction.

State Senator Jeff Van Drew, a Democrat representing parts of Atlantic County, voted against the measure because his region is "not in the shadow of Manhattan" like northern New Jersey.

"Because of that we don't have the same business and economic opportunities," he said in a statement. "With casinos located elsewhere in the state, we will only see our economic situation get worse."

Atlantic County, where Atlantic City sits, has had the highest U.S. metro foreclosure rate for five straight months, as mass layoffs following four Atlantic City casino closures in 2014 continued to have ripple effects.

Overall, revenues in the U.S. gaming market were in freefall in 2013 and 2014 but stabilized in 2015, Fitch Ratings said in a report this month. In 2016, the operating environment should be "benign," but "long-term growth prospects for the industry remain lackluster," Fitch said.

Lawmakers also sent to Governor Chris Christie on Thursday legislation that would dedicate a percentage of existing workforce development funding to help educate former casino workers, including training for new careers.

(Reporting by Hilary Russ; Editing by Diane Craft)

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