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A cap on N.J. casino licenses? Maybe, but it must be flexible | Editorial

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“With Six You Get Eggroll,” was a squeaky clean 1968 “blended family” movie featuring Doris Day and Brian Keith. They marry and create a household with a bunch of children from previous relationships.

While critics gave the comedy a weak 6.5/10 on imdb.com, its title, uttered by one of the aforementioned kids, illustrates an indisputable point: If you reach the right number of family members to dine at a 1960s Cantonese restaurant, the proprietors would throw in free egg rolls.

“With 10 You Get Disaster,” might be a good working title for a theory making its way through the halls of Trenton and Atlantic City: Cap the number of A.C. casino hotel licenses, since the nine that are now operating are starting to cannibalize each other’s revenue.

The idea received a boost when a Rutgers University report presented to an Assembly committee predicted trouble for Atlantic City’s current licensed gaming halls as the regional gambling market continues to expand. Of immediate concern, the report stated, is the predicted 2020 opening of Philadelphia’s second casino, situated at the foot of the Walt Whitman Bridge near the stadium complex.

This one casino alone, the report indicated, could siphon off $63 million to $150 million a year from Atlantic City casinos.

The idea of a New Jersey license cap — and, states like Pennsylvania have one — was first advanced this spring by Jim Johnson, the Murphy administration’s first pick to stabilize the city’s finances under the state takeover that began under former Gov. Chris Christie’s administration.

If there had been a hard cap in place earlier, however, the revivals of the Hard Rock and Ocean Casino Resort — both modestly successful — would not have been possible. It could have been argued that the seven casinos operating at mid-decade were all that the city could support.

Pennsylvania has spread out its casinos geographically, so that each has an almost exclusive territory. Atlantic City’s needs as a resort are different. If it is to become a top convention destination, it needs multiple casinos and plenty of hotel rooms in a concentrated area.

That doesn’t mean that the Casino Control Commission should be blind to the competitive landscape. Sports betting and online platforms have saved Atlantic City’s bacon for a while. New Jersey got there first and has been reaping the rewards. The overall “win” is up, but that can’t hide that slot and table game revenue in the older casinos has been shrinking.

It’s worth looking at what the Rutgers report and Johnson have to say, but many factors have to be weighed. If there is more industry consolidation, is it better to have nine casinos owned by three companies than to foster more competition? Then, there’s the thorny issue of casino licenses elsewhere in New Jersey, breaking Atlantic City’s in-state monopoly. For better or worse, cap legislation could be designed to guarantee that North Jersey gets carved into the overall license count.

Recently, it’s worked well to let the free market determine if new or revived Atlantic City casinos get the financing they need to boot up. Such may not always be the case. A judiciously applied license cap could help prevent another crash and preserve existing jobs. What lawmakers should focus on is making any license limit flexible enough to respond to changing market conditions.

Returning to the large-family entertainment genre, a big TV hit in the late 1970s was “Eight is Enough.” For, Atlantic City casinos, is it “Nine is Enough”? What’s clearly true, and proven by history, is that “You can never have too many” is a road to ruin.

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Read more https://www.nj.com/opinion/2019/11/a-cap-on-nj-casino-licenses-maybe-but-it-must-be-flexible-editorial.html

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