July 5, 2021 Land-Based, Interview

Back to the Garden State

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Gaming America reconnects with US Senator Bob Menendez of New Jersey to discuss how the state is rebounding from the pandemic with soaring gaming revenues, and how gaming is an integral part of its recovery and overall identity.

Data from UNLV’s Center for Gaming Research shows that sports betting in New Jersey is dramatically helping to recover lost revenue from land-based casino closures last year. Sportsbooks generated handle of $748m in April, 91%of which were bets placed online, making up $681.2mof the state’s total handle. How is online sports betting factored into the long-term economic stimulus plan for New Jersey following the damage brought on by the pandemic?

State and local governments have been on the front lines of the pandemic, which have seen large, unanticipated costs and their tax revenues dry up due to reduced economic activity. The industries that were not as severely impacted by the pandemic, like online sports gambling, were important to stop the bottom from falling out. In addition, since many Atlantic City casinos operate online gaming sites, those revenue streams were instrumental in keeping their brick-and-mortar operations afloat while they endured pandemic-related closures and restrictions. I’m proud that the American Rescue Plan provided bold relief to state and local governments, small businesses and families to help them weather the economic impacts of Covid-19. Now, with online sports gambling continuing to grow, and casinos beginning to draw more visitors in person, I know our state’s economy will soon recover.

 

Atlantic City casinos returned to 100% on May 19, as outlined by Governor Phil Murphy. With all capacity limits lifted now, how will that benefit land-based gaming considering social distancing measures still need to be adhered to?

As New Jersey reopens, I think we will see businesses across the state implement unique ways to ensure that people can safely partake in a variety of activities. Over 70% of New Jerseyans have received at least one dose of the vaccine. As more Americans get vaccinated and infection rates drop, more people will become comfortable travelling again and being in large indoor settings, which bodes well for our casinos. And it all couldn’t come at a better time as summer heats up and the Jersey Shore, our boardwalks and pristine beaches once again become a prime destination for families, tourists and day-trippers. Atlantic City is well-positioned to bounce back.

 

Before the pandemic, it was estimated that over 39,000 jobs were supported by gaming in the state. With the return of greater capacity comes the greater need to hire people back to fulfill demand. Are casinos able to recruit employees in order to proportionally account for that?

Atlantic City’s casinos never had any issues with hiring employees before the pandemic and I don’t expect that to change as our state reopens. What I do expect is for each casino to provide the opportunity for laid-off workers to be rehired to their former positions and salaries. There are plenty of well-trained New Jerseyans who are ready and willing to work as our casinos begin to return to normalcy.

Furthermore, the partnership programs between the casinos and Stockton University and Atlantic Cape Community College continue to graduate well qualified individuals ready for hire.

 

Can you chart some of the history of gaming in New Jersey—from the Atlantic City heyday, to UIGEA, to PASPA being overturned to the rapid growth of online gaming—and how it’s been integral not only to New Jersey’s identity, but to its economic longevity?

The Supreme Court’s decision in Christie v. National Collegiate Athletic Association was the culmination of a more than six-year protracted battle to deliver on what our residents overwhelmingly approved by referendum in 2011: the state-wide legalization of sports betting. The legalization of sports betting allowed states like New Jersey – already home to some of the most sophisticated regulations, oversight and monitoring technologies for gaming in the world – to bring the underground market out of the shadows and collect billions of dollars in much-needed revenue in the process. The decision was an economic win for the state, and a loss for criminal enterprises that hurt Americans for personal gain. Total gaming revenue in the state for April 2021 was $352.2 million, an increase of more than 326% from the $82.6 million in reported sports betting revenue in April 2020. The strong gaming industry in New Jersey enables the state to make investments in our public schools, transit and infrastructure that make it such a great state to live in.

 

How does the First Circuit ruling that the Wire Act only applies to sports betting affect New Jersey’s ability to grow beyond state lines?

On January 20, 2021, the US Court of Appeals for the First Circuit held that the prohibition on the interstate betting under the Wire Act applies only to bets and wagers placed on sporting events, and not, as the Department of Justice argues, to all types of bets and wagers. The ruling maintains the status quo for sports betting in New Jersey. In other words, those who wish to bets on sports must be present in the state. The rise in popularity of online apps helps with the growth of sports betting for those in the state but not necessarily at a casino or racetrack. For example, residents from other states may come to New Jersey to enjoy the Shore, but then also use the apps to place bets. It’s been a boon for the entire state and the ripple effects are being felt beyond the gaming industry. According to recent reports, Fort Lee, just across the George Washington Bridge from New York City and more than two hours from the Atlantic City boardwalk, was outpacing Las Vegas in daily bets. Think about that for a second. And when New Yorkers drive across the Hudson to use their online gaming apps, they stop in our local coffee shops and diners, they visit our small businesses, and they pay tolls to cross the bridge, which helps fund infrastructure improvements.

 

According the American Gaming Association’s latest data, gross gaming revenue in New Jersey for 2020 was $2.88 billion, the state tax impact was $1.19 billion and the overall economic impact was $6.45 billion. These are impressive numbers that are only trending upward. What convincing do you still need to do in order to get anti-gaming pressure groups to be more open minded to the overall benefits to the state that gaming provides?

We are still only a few years into legalized sports betting in New Jersey. And while the numbers are impressive, I think it’s important for residents to see the other tangential benefits to sports gaming-adjacent revenue, such as money visiting gamers spend in bars and restaurants, and the jobs that flow from that. We also need to ensure that we provide enough resources to those experiencing gambling addiction.

 

On that subject, with an increase in gaming comes an increase in instances of problem gambling. What responsible gaming measures are being fortified in proportion to the growth of online gambling and sports betting?

Individuals who experience a gambling addiction can find resources at the State of New Jersey Casino Control Commission website. The state also provides funding for education and treatment programs for people with a gambling problem. For example, there are more than 45 Gamblers Anonymous meetings in New Jersey every week. Individuals can also enrol themselves in New Jersey’s self-exclusion program.

 

What does the continued effort look like to ensure that the people of New Jersey, visitors and international suppliers and operators can function and gamble in a safely regulated and entertaining environment?

Since before the PAPSA decision, New Jersey has had a safely regulated environment. Before the pandemic, we witnessed the revitalization for Atlantic City. Now that the state is opening back up and people are eager to travel, I think you will see people coming to visit and taking advantage of the casinos and racetracks. Whether it’s a quick day trip to the racetrack or a family beach getaway to Atlantic City, New Jersey has something to offer everyone in the gaming space. And the best part of it is that the vast majority of our gaming visitors spend money elsewhere to support our hotels and restaurant industry, small businesses and so much more. Gaming has shown to be an economic driver for our state.

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