Atlantic City has stumbled into compromise to save itself from bankruptcy. On January 26 the city council approved a revised plan proposed by New Jersey State Governor Chris Christie, aimed at rescuing the gambling hub’s moribund finances through greater state control and new revenue sources.
Earlier, New Jersey Senate President Stephen Sweeney had introduced a bill to have the state take over running Atlantic City, allowing it to dissolve city departments, consolidate and privatize municipal services, terminate contracts with labor unions and sell city-owned assets. The city, led by Mayor Don Guardian, opposed the plan, saying it would disenfranchise voters and that similar emergency takeovers have not worked in the past.
Instead, Guardian was backing a group of bills, dubbed the “Atlantic City Rescue Plan,” aiming to tax more casino revenue. But after the legislature passed the bills, Chris Christie called them “a waste of tax payers money” and exercised his veto. Contemplating bankruptcy, Guardian was forced into a trade off.
Backed by both Guardian and Sweeney, the latest plan therefore combines elements of the previous opposing plans. It would allow both a state takeover and also measures to extract more revenue from casinos. Amid this struggle, on January 12 rival lawmakers in New Jersey reached another compromise; between competing bills that would allow a referendum to end Atlantic City’s monopoly on casino gambling in the state. The idea is to build new casinos in the state’s north, less than a half-hour’s drive from Manhattan, tax them, and channel some of the extra funds to Atlantic City. While Sweeney was insisting that only Atlantic City’s existing operators be allowed to build new projects, Assembly Speaker Vincent Prieto wanted outsiders to be allowed to bid for one too. In the end Sweeney’s bill was adopted with the amendment that any new developer must invest at least US$1 billion. If three-fifths of the State’s legislature can agree, the referendum will be held in November.
Pennsylvania allowed casinos in 2006 and other states neighboring New Jersey soon followed. Since then Atlantic City’s casino revenue has fallen from US$5.2 billion to US$2.5 billion. In 2014 alone, four of its 12 casinos closed.
