Senate President Steve Sweeney spoke yesterday before a luncheon at the Greater Atlantic City Chamber of Commerce. Here's a sampling of his comments including one directied at the recent threat by Governor Christie to go back on a campaign promise opposing VLT's outside of Atlantic City unless they made changes after a recent critical audit:
"I can tell you, I'm not posting a VLT bill for anywhere outside of Atlantic City,"
"Threatening VLTs, he has to deal with me with that, and I've already told you, it ain't happening,"
I don't think the Governor could do VLT's by executive order, so he might want to have a word with Senator Sweeney.
The casino workers' union, Unite HERE, and Americans for Prosperity are allied, along with the local conservative group Liberty and Prosperity 1776, behind a "No Morgan Stanley Bailout" campaign, an effort to cast plans for a state rescue of the half-built Revel casino as a bailout of the Morgan Stanley, the investment house that is reportedly the casino's main investor.
They union already has launched the website nomorganstanleybailout.org to highlight their opposition to the tax break the City is giving Revel on the proposed $2.5 billion casino project. This isn't UNITE Here's first attempt to stop the planned tax break. They sought to put the $300 million on the ballot as a referendum question but Atlantic City Officials rejected the unions petitions. Senator Lesniak got a bill passed unanimously through committee at the beginning of this Legislative session which would protect the tax break from a public vote as well. Here is the plan for the tax breaks:
The plan would require Revel to pay just 25 percent of its sales and room taxes over its first 20 years of operation, scheduled to start in 2011. Revel officials have called the funding "an important factor" in securing financing to complete its $2 billion megaresort.
Follow me below the fold for more on how the tax break came to be, who else is opposing and who is supporting the plan.
The State Comptroller has just released a devasting report on the "financial management practices" of Atlantic City's government. Both a press release (PDF) and the full report (PDF) are available. The report, by the way, includes a response from Atlantic City's on corrective measures alread taken.
Arguably, the worst part is that state laws to prevent abuses are repeatedly not followed. Furthermore, I think we all know wasteful (or corrupt) abuses is going on elsewhere.
Here are some of the findings of the report I found most troubling:
The personnel structure of the City Council is contrary to State law. Specifically, based on the City's population, City Council members should not have aides. Yet, there are 11 such individuals employed at a cost to the City of nearly $484,000 in 2008. They have little to do and there are few controls over their time and attendance.
The City's payroll practices are vulnerable to abuse. For example, one individual was reportedly "volunteering his time" for the City, yet we found him on the payroll at a salary of $51,500. We further found the City had waived the required 60-day waiting period for the individual's eligibility for medical benefits.
City police officers received fiscally imprudent buyouts for their accumulated leave balances upon promotion. Compounding this situation is the granting of extended sick leave to officers which could last for periods of more than one year. We found that for the 15 officers most frequently taking advantage of this benefit, the cost to the City was $1.8 million, or nearly $122,000 per officer.
The City's external auditor did not maintain its independence as required by GAGAS... Simply put, the audit organization may not audit its own work.
Speaking at the Democratic State Conference dinner for Governor Corzine last night, Al Gore reminded Democrats just how much elections matter:Calling him the "Real Deal", Gore had this to say about Corzine:
"You have a man who has the knowledge, the experience, the commitment, the compassion and the record of solid accomplishments fighting every single hour of every single day for New Jersey. Let's re-elect Jon Corzine," Gore said as the crowd of 500 cheered.
And Gore also had something for people thinking of going with Chris Daggett:
Gore dismissed the third candidate in the race , independent Chris Daggett, a former Department of Environmental Protection commissioner who has gotten the Sierra Club's endorsement , as having no chance against the better known and better financed candidates.
"You could also throw your vote away and pretend you're not doing it," said Gore. "Let me tell you how that works out."
The audacity of some elected officials when they get caught never ceases to amaze me. Take for example Craig Callaway in Atlantic City, whose latest actions gave us this start to an Atlantic City Press Story:
Secretly filming a rival politician with a hooker in an attempt to blackmail him is just part of the job description for a council president in Atlantic City. That's what Craig Callaway apparently contends.
The former head of the resort's City Council, who pleaded guilty last year to orchestrating an extortion scheme against Councilman Eugene Robinson, recently argued that his criminal actions fell under the umbrella of city work and that he is entitled to have the city cover any award from the court and maybe even have city attorneys defend him.
So filming a hooker for blackmail is city work? Embarrasing. But he's not alone either:
Three of Callaway's alleged accomplices - outgoing Councilman John Schultz, former city employee Floyd Tally and former Public Works Director David Callaway - are requesting the same from the city. However, those three have continued to maintain their innocence.
So they swear they did nothing wrong, but if they did it was just part of the job and the city has to pay for it. But maybe they are just trying to get the same treatment they gave others when they were in power:
Many of Atlantic City's indemnity agreements were approved during the peak years of battle between Craig Callaway and Mayor Lorenzo Langford. Numerous complaints and countercomplaints were filed by both sides and their supporters. The city traditionally responded by providing broad legal umbrellas for politicians and city employees.
And the campaign manager for Callaway's longtime rival offered this take:
"Taxpayers are really being beaten over the head with these lawsuits and those responsible are not required to pay at all," said Johnson, who suggested that a separate judiciary panel should determine who is responsible for their own defense and when the city must step in. "It's a flawed system."
I'd say a flawed system is an understatement if they're trying to expand the job description in this way.
New Jersey's horse racing and casino gambling industries still have a long way to go in developing a collaborative strategy to meet the competitive challenges emerging in neighboring states.
Representatives of the longtime rival industries couldn't even agree on what to discuss Wednesday at a meeting of a new commission charged with saving the state's four horse racing tracks.
Track officials wanted to talk about "racinos," the electronic betting parlors that have been introduced at 36 racetracks in 15 states since 1995. However, Joseph Fusco, a spokesman for the Casino Association of New Jersey, spoke for 20 minutes at the meeting without even mentioning the word.
Traditionally, we haven't had racinos because they were trying to protect Atlantic City and the casinos. But with additional states moving in the gaming direction, the horse racing tracks industry feel they're losing time and money not having them:
"It's not horse racing versus casinos," state Sen. Jennifer Beck of Red Bank reminded members at Wednesday's meeting of the Governor's Commission on the Horse Racing Industry. "It's New Jersey versus Pennsylvania, Maryland, Delaware and New York."
The racing industry doesn't seem to see it that way and says the casinos should fix their own problems and stay out of their business. I understand they have competing interests in some areas, but taking no action while states continue to move forward around them helps no one. And why still no word on the movement to overturn the sports gambling ban if they're looking for additional revenue? Instead, they continue to fight amongst themselves.
Governor Corzine said on Friday that he will intervene and join Senator Lesniak's lawsuit seeking to overturn a federal prohibition on sports betting:
"The federal government's prohibition on sports betting for some but not all states is fundamentally unfair," Governor Corzine said. "There should be uniformity in the application of federal law. If one state is allowed to legalize betting on sports events, all states should be allowed the same opportunity."
[snip]
"Delaware's entry into sports wagering and table games is a serious threat to the both the casino and horse racing industries in New Jersey," Governor Corzine said. "We must do everything in our power to stay competitive. We simply cannot afford to sit back and let neighboring states press an unfair advantage against us anytime, and certainly not in the midst of this global economic crisis."
Senator Van Drew had a good deal to say on Corzine joining the lawsuit including a call to Senator Codey to post the bill for a vote because he thinks pushing legislation will move the lawsuit quicker:
"While I think Senator Lesniak will ultimately be successful in arguing the unconstitutionality of the federal sports betting ban, I think now is the perfect time for New Jersey to make a statement right here within our own borders that we won't let our casinos become uncompetitive and obsolete when compared to gaming establishments in Delaware, Pennsylvania and New York.
"During the last three legislative sessions, I've sponsored bills to legalize sports betting in New Jersey, regardless of the federal ban. That legislation has passed the Assembly this session, but remains stalled in the Senate.
"Today, I'd like to call on Senate President Codey to post the bill, so we can jump-start the discussion of legalized sports betting within the Garden State.
"Posting the bill is a calculated risk. If Senator Lesniak is successful in court, we want to have the legislative framework ready, so we can begin legal sports wagering at our State's casinos as soon as possible.
"However, if the bill moves through the Legislature and becomes law before Senator Lesniak ultimately wins in court, our efforts to implement legal sports betting would most likely garner a court challenge - giving us another opportunity to weigh the constitutionality of the federal ban in court, and hopefully, speeding up the process in terms of deliberation of Senator Lesniak's suit.
New Jersey lawmakers dropped the ball on this by not taking action against the federal law sooner. We just hope the mistake doesn't cost too many more jobs in an already battered Atlantic City.
They could have challenged the law sooner, but I don't know if that would have made a difference necessarily. Maybe the thinking now is that even if they can't get it legalized or win the lawsuit, they can say they did everything to try and get it done with the decision being out of their hands. And if they do actually win the suit, jackpot.
The smell of oil sheen hair spray and the hum of electric razors set the scene for a debate Saturday at Omar and Abdullah's Hair Bazaar between mayoral candidates Mayor Lorenzo Langford and 2nd Ward Councilman Marty Small.
Tufts of black hair speckled the floor, and diesel fumes from buses that passed by on Atlantic Avenue wafted through the door. Posters of President Barack Obama, Martin Luther King Jr. and Malcolm X hung on the walls of the shop.
They didn't even publicize the event and no media was invited, but it seems the AC Press was able to find about about things.
There was no podium, no microphones and no television cameras. But there was a moderator - barbershop co-owner Omar Anderson.
Things definitely appeared to get a little testy:
"You're a sellout! You're a snitch to the FBI!- someone in the crowd near the front door yelled to Small.
"I can't be controlled or manipulated by anyone. I'm Marty Small. Check the record. And you better stop mouthing off back there," Small yelled toward the front of the shop before sitting back down in his chair.
Ah Atlantic City politics. The initial endorsement vote of the Democratic Committee ended in a tie between Small and Langford. They appealed to the state democratic party for assistance, but were told the party would not make an endorsement, stating it was a city matter. In a 2nd vote, Langford won the endorsement 27-24 to run on the line. State Senator Jim Whelan bucked the local party and has endorsed Small in the race. The voters will have their say in the primary on June 2.
Not like this will sway the federal government very much, but FDU is out with a new public mind poll today talking abouew how New Jerseyans favor legalized sports betting. From the polling memo:
According to the latest results from Fairleigh Dickinson University?s PublicMind, 63 percent of voters say they would favor making sports-betting legal in New Jersey at Atlantic City casinos, while 32% say they would oppose it. Men favor it by more than a 2-1 margin (69-27), more strongly than women (58-36). Self-described liberals favor it (70-27) more strongly than conservatives (56-38).
[snip]
By a similar margin of 63 percent to 30 percent, voters also say they would favor making sports betting legal in New Jersey at horse-racing tracks.
But voters split 48 percent to 43 percent on the question of legalizing sports betting at off-track betting parlors.
By a wide margin, voters oppose legalizing sports betting by telephone and the Internet. Just 26 percent said they would favor sports-betting by telephone and Internet while 66 percent said they would oppose it.
It's interesting to see just where people will draw the line even though they know it's going on regardless of where they would allow it. Last month, Senator Lesniak filed suit to overturn the federal sports betting ban. He says sports betting exists and will continue to exist whether states tax it or not. Assemblyman Greenwald threw his support behind the lawsuit as well. He was a sponsor of the legislation that passed the Assembly in 2008 to give New Jersey's voters the ability to decide in a November General Election referendum whether Atlantic City's casinos should be able to accept in-person wagers solely on professional sports.
I'll put the poll breakdown and methodology below the fold.
After 10 years of poor attendance and a struggle for attention blocks away from the casinos, the minor league Atlantic City Surf has struck out.
The team, which played in the independent Can-Am League, is discontinuing operations, along with another Can-Am team, the Ottawa Voyageurs.
Miles Wolff, the league's commissioner, said today that a deal to sell the Surf last week fell through. Without strong ownership and the money to back it, Wolff says it made no sense to continue to operate the club.
No dealer? No deal. That's the market's response to Atlantic City's grand experiment with automated poker games that cut out dealers and chips.
Trump Plaza Hotel and Casino has removed 14 automated poker tables after trying them out for a few months. The electronic games automatically shuffle and deal video-style cards that appear on a large display screen in the middle of the table. Each player has a smaller display screen equipped with touch controls to place bets, call or fold.
The hope was that they would attract a younger generation of gamblers. But the reality was disappointing
The casinos have already experienced many layoffs as they have seen revenues decline, so this will be welcome news to employees as the unions feared the machines would lead to job losses. Atlantic City has now seen their baseball team go under, experienced the difficulties with the horse racing industry and dealt with struggles from the casino's. Last week, lawsuits were filed to allow sports betting, but those are long shots. And it's again important to note how many state programs are tied to the success of Atlantic City and the gaming industry as a whole. The economic landscape of Atlantic City continues to change and it's unclear what the picture will look like when the dust settles.
According to the latest statistics, the state recently added the 1,000th name to the "self-exclusion list," a program that has doubled in size in just the past three years.
"I know that this program has helped a lot of gamblers and their families who have struggled with this addiction," said Linda M. Kassekert, chair of the New Jersey Casino Control Commission.
Gamblers have the option of signing up for a one-year ban, five years or a lifetime. Once a person is in the program, Atlantic City's 11 casinos are not allowed to let them on the gaming floor and must remove them from any mailing lists and stop offering them incentives to gamble.
But while the program is good, some say more should be done:
Kearney argued that self-exclusion programs come into play only after someone falls victim to a gambling problem. He said the casino industry and regulators must do more to prevent addiction.
"This is all just sugarcoating," he said. "They aren't addressing the simple fact that no gaming operator or casino employee will tap someone on the shoulder and say, 'Hey, you're gambling too much money.'"
In New Jersey, the first $600,000 in fines imposed on casinos for gaming violations go toward treatment and education programs organized by the New Jersey Council on Compulsive Gambling.
When a gambler is trying to quit, they need all the help they can get. The self exclusion list looks like a safety net to catch people from falling again. But by no means does it prevent them from falling the first time, nor is it intended to do that.
Donald Trump was on David Letterman last night. He talked about the troubles the industry is facing as a whole, which we have written about here at Blue Jersey:My concern is that with our dependence on the gaming industry to fund many vital programs, many residents will be going bust with these casinos.
Blaming the recession and Atlantic City's withering casino market, Penn said Thursday it is scrapping plans to build on a 23-acre site along the Route 30 corridor, far away from the existing casinos.
"I think as we've watched New Jersey, sadly, that's a market at the moment that is significantly less appealing to us, and that shouldn't be a surprise," said Peter M. Carlino, Penn's chairman and chief executive officer. "There is much more bad news coming."
Carlino noted that Atlantic City is mired in a prolonged slump and will face extra competition from Pennsylvania's gaming industry when a new slots parlor opens in Bethlehem in May. Competition will become even more intense when Philadelphia's two proposed casinos open in the next few years, he added.
"That's nothing but bad, bad, bad news for Atlantic City," Carlino said in a conference call Thursday with analysts. "It's going to be a while, and maybe a long while, before the picture changes in Atlantic City. It's not a pretty picture."
And like i've pointed out repeatedly, bad news for Atlantic City means worse news for the state because of all the programs that are funded through the Casino re-development fund. With revenues continuing to fall, we'll see if any of those programs are on the chopping block when the Governor presents his budget next month.
The gaming industry in New Jersey has long been a money maker, helping to fund programs throughout the state. Unfortunately for those programs, while many states are seeing increases in lottery sales, New Jersey is bucking the trend:
Scientific Games, a maker of scratch-off lottery tickets, reports that revenue from scratch-off and daily lottery games is up since July in 25 of 42 states with lotteries.
In New Jersey, however, lottery revenue for the first four months of the new fiscal year -- which began in July -- has dipped 4 percent, from $352 million to $338 million through the end of November, the last month for which statistics are available.
It's about helping to feed a nutritious meal to a young student, or providing scholarships to a high school student. It's about improving the quality of life for disabled veterans and developmentally disabled individuals. As one of the most cost-efficient lotteries in the United States, the New Jersey Lottery spends approximately one percent of its revenues to operate and promote its business. As the State?s fourth largest revenue producer, the Lottery raised over $2.4 billion in sales for fiscal year 2006, and was able to contribute more than $844 million to the State to help fund education and institutions, making everyone in the Garden State a winner.
Since its inception 35 years ago, the Lottery has dedicated over $15.6 billion to programs that benefit millions of New Jersey residents. Educational opportunity programs, the Department of Human Services, the Department of Military and Veterans Affairs, the School Nutrition Program, and the Marie Katzenbach School for the Deaf are just a few of the organizations and programs whose constituencies benefit from Lottery proceeds.
Atlantic City's revenues continued to fall in December, according to the latest statistics from New Jersey, with the gambling centre's 11 land casinos showing an accelerated decline over the previous year. The casinos won $302 million from gamblers in December, down 18.7 percent, exceeding the 15.1 percent decline set in September.
Throughout 2008, Atlantic City's casinos won 7.6 percent less from gamblers than they had in 2007, and prior to that, casino revenue had increased every year since gambling was legalised in the area back in 1978.
Joseph Weinert, senior vice president of consultants Spectrum Gaming Group commented: "Over the last two years, about $600 million in gross gaming revenue has disappeared from Atlantic City." He added that 3 300 casino jobs had been the human cost of the two year decline.
Moneys in the Casino Revenue Fund shall be appropriated exclusively for reductions in property taxes, rentals, telephone, gas, electric, and municipal utilities charges of eligible senior citizens and disabled residents of the State, and for additional or expanded health services or benefits or transportation services or benefits to eligible senior citizens and disabled residents, as shall be provided by law.
By no means am I encouraging people to go out and gamble, but we have created a system where many vital programs depend on the willingness of people to continue placing their bets. With the the current state of our budget, it's going to be difficult to find other funding sources. That could potentially expose some of these programs to the chopping block.
In another sign of Atlantic City's casino slump, Trump Entertainment Resorts Inc. said Friday it will delay making a $53.1 million bond interest payment as it looks to conserve cash.
The company plans to use a 30-day grace period for making the payment, which is due Monday. It will now have extra time to negotiate with lenders on ways to restructure its finances.
And what happens if they don't reach an agreement on re-structuring:
The bond interest payment is part of nearly $1.25 billion of Trump debt.
If the company fails to make the interest payment within the grace period, holders of 25 percent of the outstanding principal of the bond will be able to accelerate the maturity of the notes. Further, the lenders for a $490 million Trump loan would be able to accelerate payment of the debt, the statement said.
Moneys in the Casino Revenue Fund shall be appropriated exclusively for reductions in property taxes, rentals, telephone, gas, electric, and municipal utilities charges of eligible senior citizens and disabled residents of the State, and for additional or expanded health services or benefits or transportation services or benefits to eligible senior citizens and disabled residents, as shall be provided by law.
The Casino revenue fund, which helps in all of these areas, totaled $413 billion in funding for 2008. People were already trying to get more of the casino revenue pie before this latest news. In 2007 alone, the Casino revenue fund generated $400 million for the PAAD program alone. The economy is reshaping the landscape of just about everything and not even Donal Trump or the casinos are immune. Unfortunately, they could be taking many other innocent people with them on the bumpy ride
Atlantic City has a new mayor today. Problem is, the old one isn't leaving just yet.
Lorenzo Langford, who won the election last week, had his victory certified by the county Board of Elections on Tuesday, even though government offices were closed. The certification was to be delivered to City Hall this morning.
But Scott Evans, who has been mayor for nearly a year and lost the Democratic primary to Langford in June, says he will remain as mayor until Langford holds a public swearing-in ceremony on Thursday.
It's only a temporary situation, but this has the makings for an interesting TV script should Hollywood be looking for ideas.
Still unresolved is whether Atlantic City Race Course will get a cut of the money to support an expanded Thoroughbred meet in 2009. Now, Freehold Raceway, a harness track, is said to be in jeopardy because its parent company won't accept $1.6 million negotiated earlier.
The Standardbred Breeders and Owners Association of New Jersey said a Nov. 7 conference call failed to produce a resolution. The SBOANJ had threatened to yank its authorization for simulcasts at Freehold Nov. 5, but allowed more time for negotiations.
But this isn't just a NJ issue and it isn't just about horse racing monies either:
Freehold is owned by Pennwood Racing, whose partners are Penn National Gaming Inc. and Greenwood Racing, two Pennsylvania-based companies. PNGI isn't against the Freehold subsidy but won't sign off on the agreement because it keeps racetrack owners from pursuing gaming. PNGI has expressed interest in developing a casino in Atlantic City.
The SBOANJ, in a release, said Joe Corbo of the New Jersey Casino Association indicated the casinos probably wouldn't agree to give Freehold its cut of the subsidy unless PNGI signed the agreement. SBOANJ legal counsel Joel Sterns told Freehold officials the track could end up closing should purses not be supplemented.
This seems like it is also a NJ turf war about where the money goes:
The purse subsidy--$30 million a year for three years-goes to the New Jersey Sports and Exposition Authority, which operates Meadowlands and Monmouth Park. A previous four-year supplement went to purses at the two NJSEA tracks and Freehold; Atlantic City wasn?t included. Other tracks can be in the mix if the affected parties agree.
There is friction between Atlantic City and the New Jersey Thoroughbred Horsemen's Association, which wants Thoroughbred racing's share of the subsidy to support racing at Monmouth and Meadowlands. The New Jersey Racing Commission will award racing dates for 2009 at its Nov. 19 meeting; it remains to be seen how it will rule on a racing schedule for Atlantic City, which said it could offer six days without a purse supplement.
During its meet this spring, Atlantic City circulated petitions calling for the track to get part of the subsidy. The petitions were sent to local legislators, who reportedly are assisting the track in the subsidy fight so it can maintain live racing and support the southern New Jersey economy. Atlantic City is open year-round for simulcasts and operates an off-track betting parlor in nearby Vineland.
There are so many factors at play in this one. You would think they will come to some agreement because they wouldn't want to cut off their nose to spite their face and lose a race track in the process. This argument that continues to flair up over gambling, be it casino gaming, sports betting or horse racing will continue because they try to address the problem one piece at a time rather than approaching the gaming industry as a whole. Under the current approach, everyone has their own competing interests within their piece of the industry they are trying to protect.
In between making phone calls through BarackObama.com (it's easy!), I listened to a conference call in which Democrats discussed turnout in Atlantic County. Participants included Congressional candidate Dave Kurkowski, State Senator Jim Whelan, and Beth Schroeder of Atlantic County Democrats. Here's what I viewed as the takeaway messages:
Huge turnout is expected, and first time voters may slow lines. Voters should make arrangements to arrive early and have enough to time to vote, just as they make arrangements to deal with any other important thing they have to do. (Of course, if you listened to Blue Jersey, you already voted.)
If newly registered voters did not receive their card, and we know this will happen in many cases due to the huge number of recent registrations, they should still be able to vote. If they are not in the book, they should request a provisional ballot. Challengers should be trained to deal with this situation.
Whelan and Kurkwoski both believe South Jersey voters should be getting the message that if they support Barack Obama, they should also vote for Democrats in all the downballot races.
There is unprecedented intensity and interest in volunteering. Atlantic County had over 200 people sign up to volunteer, and over a thousand people show up.
Democratic volunteers will be encouraging the people in long lines.
MGM today said it is halting the project, which would have risen on land next to the Borgata, the glitzy casino the company operates jointly with Boyd Gaming. The announcement came on the same day MGM Mirage reported a 67 percent plunge in third-quarter earnings, largely because of sluggish revenue from its properties on the Las Vegas strip.
"We continue to believe Atlantic City represents an important market for further development," Terry Lanni, MGM's chairman and CEO, said in a statement. "We intend to resume development at such time as economic conditions and capital markets are sufficiently improved to enable us to go forward on a reasonable basis."
I don't know about you, but I'm really glad the AC Council postponed that smoking ban for another year. Maybe next they'll get to work on the capital markets and the overall weak economy, so the factors that actually drive these business decisions can be addressed.
Smoking will be permitted in Atlantic City's 11 casinos for at least the next year under a change-of-heart vote taken by the City Council.
Tonight's vote cancels a temporary smoking ban that took effect 12 days ago.
The law still needs to be signed by Mayor Scott Evans before taking effect. Evans was not at the meeting. Once the measure is signed, Atlantic City's casinos will revert to a previous arrangement under which smoking is permitted on no more than 25 percent of a casino floor.
I'm sure that if the economy weren't the way it is, they wouldn't take this action. Yeah, right. I'd also be willing to bet that the casinos who acted responsibly and made upgrades to accommodate their guests yet comply with the new law greatly appreciate this action as well.
