PA NJ casinos

Possible New Casinos In North Jersey Threaten Pennsylvania Gaming Interests

New Jersey appears set to consider an expansion of brick-and-mortar gambling in the northern part of the state, a move that would create competition for some casinos in Pennsylvania.

What we know about New Jersey’s plans

Gov. Chris Christie and lawmakers in New Jersey announced plans on Monday to back a plan that would allow the first-ever expansion of gaming in the state outside of Atlantic City (beyond online gaming and poker, of course).

The plan is still just that: A plan. But it appears that the legislature will move to approve a measure that would put gaming expansion on the ballot in New Jersey in November, allowing for the possible creation of two new casinos.

Christie offered this in a statement on Monday:

I’m pleased, after a lot of effort and a lot of conversation amongst the three of us, that we can announce today that we have an agreement on how to move forward on North Jersey gaming, and I’ll outline it as follows:

As the new session begins tomorrow, the Sarlo/Sweeney version of the constitutional resolution will be introduced in both houses. There will be an addition to the Sarlo/Sweeney resolution. That addition is at the suggestion of the speaker, that, for each licensee there be a mandatory minimum $1 billion investment in each license. So in each of the two licenses those projects must be worth a capital investment, at least, of $1 billion each, in each of those licenses. There will also be the appropriate timelines that were in the Sarlo/Sweeney bill and that will address the ability to make this move quickly. After, if it’s approved by the voters in November, that the process can then move quickly, so that if it’s approved that North Jersey gaming projects can get moving as quickly as possible.

Not a guarantee that casinos are coming

While an agreement has been hammered out in the legislature, getting it past the voting public might be another matter.

Senate President Stephen Sweeney is behind the measure and has made stipulations to make sure AC interests are involved in the creation and ownership of the the new casinos. But some interests in AC will oppose the ballot measure, according to NJ.com. And the public is not necessarily behind the expansion:

A Fairleigh Dickinson University PublicMind poll from June showed 56 percent of New Jerseyans oppose north Jersey casinos.

“I think we can beat it,” state Sen. Jim Whelan (D-Atlantic) said. “It’s no good for New Jersey.”

But if the NJ casinos do come, an impact on PA casinos

Pennsylvania casinos arguably stand to be the biggest loser if North Jersey gets casinos.

It’s possible that every casino in the eastern part of the state could be negatively impacted by increased competition. Most in danger would be Sands Bethlehem. That establishment gets a lot of traffic from New York, something that could be curtailed if casinos are built between it and NJ.

Other casinos could also feel a hit, such as:

  • Mount Airy Casino Resort in the Poconos
  • Mohegan Sun Pocono
  • Parx Casino in Philadelphia, and to a lesser extent SugarHouse and Harrah’s

All of these casinos had previously only competed with each other for gaming dollars, and with Atlantic City. Two more casinos in the region would obviously appear to be a major threat to these casinos’ bottom line.

Gaming expansion still on deck in the state

New Jersey’s possible gaming expansion comes even as Pennsylvania considers a number of possible gaming measures in the state — including an expansion of slots at non-casino properties and the possibility of PA online poker and casino games.

The gaming expansion talk that had momentarily picked up steam in November now appears relegated to being considered in the spring, as the state deals with an ongoing budget impasse.

The gaming measures likely would do little to offset the impact of North Jersey casinos — other than online gaming, which could help with attracting new customers and establishing more consumer loyalty to PA casinos. Established casinos are not in favor of some proposed gaming expansions, such as video gaming terminals being allowed in private establishments, such as taverns.

Still, gaming expansion in the state has been examined somewhat myopically in Pennsylvania, to this point. The possibility that New Jersey will make a major move into the northern part of the state could change the calculus for its neighbor to the west.