Assemblyman Chris A.

Brown District 2 Testimony before the Assembly Regulatory Oversight and Gaming Committee July 19, 2012

Mr. Chairman, I want to thank you for the opportunity to speak here today. Please allow me to begin by complimenting my legislative colleagues. We are elected to represent our respective districts and to fight on behalf of the interests of the people living there. We also have, I believe, a higher calling to make sure we dont put our own self interest or district ahead of the entire State. My colleagues, those representing Bergen County and those representing districts which have a large number of horse farms and race tracks, are very eloquent and passionate. And I might add extremely persistent. I respect that. I applaud your efforts in fighting for your constituencies, and I sincerely want to help you. However, your efforts to help your districts will have a profoundly negative affect on the State as a whole. Putting a casino in the Meadowlands is like putting a $1000 saddle on a $10 race horse. Its simply too high of a price to pay for a horse that ultimately wont succeed. Independent research and studies have demonstrated a Meadowlands casino is going to cost the state jobs, revenue, and capital investment without doing anything to improve gaming in New Jersey. Casino gaming in the Meadowlands will not grow New Jerseys gaming market. To the contrary, it will steal 45% of the revenue generated from existing Atlantic City customers.1 While, I am sure we will hear a lot today about how a casino in the Meadowlands will pull North Jersey patrons back from New York. If that was where the story ended, things would be fine. Unfortunately, the truth is, placing a casino in the Meadowlands will also pull patrons from Central Jersey, who now go to Atlantic City. To quote the Christiansen Report, The primary market for the Meadowlands falls within the primary market area of Atlantic City.2 These are the very gamblers we need to continue to entice to Atlantic City to ensure there is sufficient gaming revenue to invest in non gaming attractions. Now that we are able to properly market Atlantic City and re-invest in non-gaming attractions we are in a position to further

distinguish ourselves as a premier gaming destination from the convenience gaming our neighboring states now offer. There will be a loss to the state in slot revenue from existing casinos of $600 million per year, if we allow a casino at the Meadowlands.3 Experts will testify that creating intrastate gaming competition will only mean people will lose their jobs. By one estimate, 3,800 people will be out of work. One hundred ninety million dollars in payroll will vanish.4 Moreover, experts will testify programs for seniors and the disabled, like PAAD and Meals on Wheels, would lose $45 million per year, nearly a quarter of the current revenue stream.5 The whole discussion on a Meadowlands casino creates uncertainty. Just by having this hearing today, you are causing uncertainty in the market. Uncertainty is bad for business. Allowing a Meadowlands casino undermines our destination resort gaming model and creates competing state policies, sending the wrong message to investors. By creating intrastate competition, you are telling investors that neither the Meadowlands nor Atlantic City is a sure bet. For some perspective, shortly after Governor McGreevey simply proposed to raise the casino tax by 2%, local gaming stocks lost more than $500 million in market value. Just because of a trial balloon.6 On the other hand, with certainty in our market, even during a recession, investors poured $5 billion of new capital into Atlantic Citys casinos.7 That is the good that can happen with stability in our state policy and a product worth investing in. I appreciate the concern some have expressed about the impact of interstate gaming competition, because it affects all of New Jersey. However, a casino in the Meadowlands or at Monmouth or at Freehold is not the appropriate answer. The wisest, long term business approach is to offer a product that stands out from the rest of the marketplace. A report by The Innovative Group concluded that gamers found it extremely important to have a resort-like atmosphere and highly value the amenities of a resort. 8 We already offer that. Only Nevada, Mississippi, and New Jersey use the resort destination gaming model. We are already unique to our market. We have a concentration of licensees in a city that was founded over

a century ago as a place to get away from it all with an ocean, beach, boardwalk, convention center, retail outlets, hotel rooms, all of which draw 30 million visitors per year. A casino in the Meadowlands will not tip the competitive balance in New Jerseys favor; it will only undercut efforts already underway to re-assert ourselves in the market. A resort destination business model backed by consistent state policy is a proven and durable economic engine for the entire state. We should not change that. Thank you.

2010 Independent consultant study.

VLT Feasibility Consultant Analysis and Report. Final Report. Christiansen Capital Advisors. September 28, 2007. Page 32.
3

2010 Independent consultant study 2010 Independent consultant study. 2010 Independent consultant study Casinos say budget kills golden goose. Press of Atlantic City. February 5, 2003. 2010 Independent consultant study.

Build It and They Will Come, or Will They? Should a Racino be a Resort? Steven M. Rittvo, The Innovation Group. Arizona Gaming Symposium on Racing. 2006.