Promoted by Rosi.
Cross-posted from FireDogLake
When New Jersey Governor Chris Christie received the endorsement of the Laborers International Union of North America (LIUNA) many in the media and national political circles just took it as further evidence of Christie’s bi-partisan appeal. A politician so popular even unions would endorse him. But they were missing the story. LIUNA’s endorsement was actually due to one of New Jersey’s biggest boondoogles, the now named Revel Casino-Hotel in Atlantic City which has cost the taxpayers millions.
While the Christie campaign spun the endorsement as a validation of Christie’s record on helping the private sector, LIUNA leadership had no trouble noting the publicly funded quid pro quo.
[LIUNA Leader Ray] Pocino cited the GOP governor’s accomplishments, including his signing the Higher Education Bond act, which he said will lead to more than $1 billion in construction, including new classrooms and labs; authorization of the Transportation Trust Fund for roads and bridges improvement totaling an estimated $5 billion, and his support for the Revel Casino project and the Bayonne Bridge.
It also probably didn’t hurt that Christie appointed Pocino to a seat on the board of the Port Authority of New York and New Jersey.
Revel has been, to put it lightly, a disaster. Originally imagined as more of a resort than a casino, Revel cost $2.4 billion to open. Even before Revel opened it was considered a high risk investment in a city already on the decline due to gambling competition from Delaware and Pennsylvania. Progressives opposed state investments in the project which came during the same time Governor Christie was cutting education and healthcare services for women. Christie invested $261 million of New Jersey tax money via credits as Morgan Stanley backed out of Revel fearing it was a loser.
Not soon after Revel opened it became clear the resort idea was as dumb as many thought it was and “Revel Atlantic City” went into bankruptcy. The bankruptcy put the State of New Jersey on the hook as Revel announced that the casino’s value had dropped from $2.4 billion to $450 million. Ouch.
Now the “Revel Casino-Hotel” is trying not to go bust again by doubling down on gambling.
Revel, hailed by Gov. Chris Christie as a “turning point” for the city when it opened in April 2012, lost $111 million its first year. And last year, Pennsylvania displaced Atlantic City as the gambling capital of the East, according to the American Gaming Association…
Revel, now owned by several hedge funds, has told state regulators that it anticipates cutting its operating loss by more than half, to less than $43 million this year. The fortunes are not just the casino’s, but New Jersey’s. The state relies on casino gambling for $300 million in tax revenue and is counting on online gambling at casinos to provide an additional $180 million.
Did you catch that? Revel hopes to lose $43 million this year. That’s the good scenario. Winning is losing $43 million. How do you like those odds?
But hey, lets not be too tough on Governor Christie. He had to do something to stimulate New Jersey’s economy. What’s public money for if not to make job creating investments, even if they are in failed enterprises. It’s not like there were any alternatives.
This month Revel will reimburse slot losses to get people in the casino. You lose, you get your money back. How do the taxpayers get in on that game?
Photo of Revel Casino-Hotel by Dough4872 released to Public Domain.