With GGR in New Jersey growing quickly, lawmakers are taking preemptive measures to limit the expansion of the gambling industry in a bid to weather abrupt changes in the gaming climate, which is going to get difficult for the Garden State.
New Jersey to Reconsider Casino Expansion
With New Jersey’s Gross Gaming Revenue (GGR) growing at a heady pace, officials are beginning to realize the long-term sustainability of the casino industry in the Garden State may be close to a tipping point.
After New Jersey’s sports betting handle overtook Nevada’s several months in a row, the New Jersey Division of Gaming Enforcement (NJDGE) has cautioned that the bonanza would not continue for much longer.
Similar to Nevada, New Jersey may now consider to limit the number of physical properties that offer gambling products.
So far, NJ has nine land-based casinos, and based on a report presented to a state Assembly Panel on Thursday and conducted by Rutgers University, no more properties should be allowed.
A Crowded Casino Market in the Northeast
Jim Johnson, a champion of economic stability in New Jersey who worked with Gov. Phil Murphy, has been among the people to voice concern about expanding the casino industry any further.
Mr. Johnson referred to the sustainability of even existing casinos ‘a very serious concern,’ posing its own challenges. He painted a gloomy picture for the entire industry:
“The trendlines suggest things are going to be down. The Atlantic City casino industry is vulnerable to challenges from within, and competition from outside the state. The data is really stark.”
Based on the report, a soon-to-arrive casino in Philadelphia’s stadium district would syphon off as much as $150 million from New Jersey.
The minimum projected amount that would swing the way of Philadelphia is at least $63 million. The upcoming property will feature some 2,000 slot machines, proving a valuable hub for gaming operations.
Adding More Casinos – That’s Just a Bad Idea
Responding to a suggestion to convert the Snowboat hotel into a casino establishment, Democratic Assemblyman Ralph Caputo called the move a ‘bad idea,’ as the gross operating revenue of casinos has started declining.
Mr. Caputo cited the arrival of the Hard Rock and Ocean Casino Resort as the main instigators of these problems. When Hard Rock bought Trump Taj Mahal – and rebranded it – the casino had lost $300 million already. Moving forward the state will take a closer look at what it can do to guarantee the sustainability of the industry.
The challenges are both internal and external. Casinos are adding more square footage and gaming tables whereas neighboring states are cozying up to the idea of expanding their own gaming industries.
This leads to over-saturation in a rather constricted market that will eventually start biting into the work force, taxes, and more, lawmakers fear.
At least, the good news is New Jersey is working on the issue.