1978-2014: Casinos without liberty fail to save Atlantic City.

1976:? New Jersey Constitution amended to permit casino gambling in Atlantic City.? Because casino gambling? is illegal in every other state but Nevada, Atlantic City again has a monopoly on an important tourist attraction?just like what it had with liquor between 1919 and 1934.

1978:?? After the people of New Jersey vote gives people the freedom to decide for themselves whether or not to gamble,?the?New Jersey ?Legislature denies the most basic rights to almost everyone involved in the new casino industry.

  1. ?The New Jersey Casino Act?of 1978 requires every casino to have to have 500 ?first class? hotel rooms.?? At that time, there was only one hotel in Atlantic City with 500 rooms.?? That was the Chalfonte-Haddon Hall owned by a casino company called Resorts International Casino.?? No other casino can?open until it gets permits and builds hundreds of ?first class? hotel rooms. The politically appointed ?Casino Control Commission? defined a ?first-class? hotel room.?? The Commission later rejects?a construction plan for one casino because it disapproved of the casino?s choice of wallpaper for the hotel bathrooms.?? The 500 room requirement guarantees that:? ?(a) Resorts International has?a two year monopoly on the Atlantic City casino business, and (b) few if any local businesses will?own casinos.?? (Local power broker Pat McGahn, brother of Democratic State Senator Joe McGahn, is the attorney and key lobbyist for Resorts International?? He? brags that his fee was paid with hundreds of thousands of dollars of Resorts International stock when it was worth less than $1 per share.?? Shortly after opening, that stock is?worth more than $140 per share).
  2. ?The NJ Casino Act of 1978 makes it a crime for any casino, or casino employ to run for public office, contribute to any political campaign, or do anything to support or oppose any candidate. In Nevada, casinos are very active in politics, and did much to promote honesty and efficiency in government.?? But in New Jersey, casinos pay 70% of local and school taxes, and roughly half of all county taxes. They also pay the salaries of two government agencies that regulated them, the Casino Control Commission and the State Police Division of Gaming Enforcement.?? Casinos also pay all state corporate, business,?income, and luxury?taxes.?? Yet nobody who owns, works for, or services a casino is allowed to have any?say as to how any of that money is spent.???The union for bartenders, waitresses, and chambermaids has far more political clout than the?companies?they work for.???New Jersey?s? rotten ?pay to play? political culture gets even worse.?? Even flamboyant casino owner Donald Trump quickly learns it is in his?best interest to hire the ?right? lawyers, lobbyists, contractors, consultants, and other professionals, and not to make any remarks critical of any government policy or official.?? Some local ward councilmen routinely bully?casinos into giving them frozen turkeys to hand out to their constituents for Thanksgiving and Christmas.
  3. ?The NJ Casino Act of 1978 forced Atlantic City casinos to pay 1.25% of their gross casino win to a fund controlled by a highly political ?Casino Reinvestment Development Authority? (CRDA).?? That money was ?earmarked? for the pet projects of the most influential politicians in the state.?? In many ways, the 1.25% CRDA ?contribution? worked the same way as the ?skim? taken by mobster Bugsy Siegel from his Las Vegas casinos in the 1940?s.?? The only difference was that Bugsy Siegel used his “skim” to illegally pay back his friends in the mob, while the CRDA “skim” was used to legally buy votes and campaign contributions for politicians.


1979:? ? New Jersey?s ?Law Against Discrimination (LAD) was amended to provide for ?fee shifting?.?? ?For more than 200 years, ?lawyers in America were paid by their clients.?? If lawyers got good results for their clients, they got good fees.?? If they recovered little or no money for their clients, lawyers got little or no fees?unless the client agreed to? pay? the lawyer for his or her work regardless of outcome.

The ?fee shifting? law of New Jersey Law Against Discrimination changes all that.? It forces the companies or government agencies being sued to pay for whatever work the lawyer claims he did?even when the client recovers little or nothing from the case.?? ?NJ Courts also changed the rules for proving ?emotional distress?.???? Expert medical evidence is needed to prove ?emotional distress? for most cases in New Jersey.?? But when someone claims ?emotional distress? from ?discrimination?, no such proof is needed.?? In most cases, the plaintiff?that is the person who starts a lawsuit– has the burden of proving his or her case.??? But if someone in a ?protected category? ?complains of ?discrimination? in a lawsuit when denied a raise or promotion, or thinks someone else is being treated better,the employer has the burden of proving it did not discriminate.???? Because this is hard to prove, most employers settle?or hire and promote bad employees so they don?t get sued.??? Today, New Jersey? recognizes the following ?protected categories? in ?discrimination? cases:? ??race, religion, color, national origin, age, marital, domestic partnership, or civil union status, sex, gender expression or identity, military service, affectional or sexual orientation, pregnancy, family status, or source of lawful income?.?? If anyone in that category claims they are a victim of discrimination, the people or businesses they sue g normally has the burden of proving they are innocent.?? Many businesses throughout New Jersey shut down or left the state to avoid these lawsuits.

1993:? New Jersey ends free parking at casinos by charging a $2 parking tax at every casino.? Tax increased to $3 in 2003.???? Besides chasing away tourists,? the parking tax discouraged locals from patronizing shops and restaurant at and around the casinos.

1999:? Republican Governor Whitman changes mission of Board of Public Utilities (BPU) .?? It was originally set up to protect consumers from gouging by utility companies.?? New mission of BPU is to double and triple electric rates? as a stealth tax to pay for ?green? energy,? ?energy efficient? appliances,? charity for people who don?t pay their electric bills, and ?stimulus? programs by utility companies to create jobs.???? Rate increases for ?green energy? greatly increased under Democrat Governors Jim McGreevey and Jon Corzine from 2002 through 2009.???? In the summer of 2010 the Borgata Casino announced lower profits and massive layoffs caused in part by ?higher energy costs?.

2004:?? New Jersey starts 5% hotel/motel tax on top of 6% sales tax, plus up to 3% local tax for total of 14% on top of real estate tax, business, and income taxes.??? Hotels in Atlantic City pay an extra 5% luxury tax, together with an extra 3% tax on alcoholic drinks plus a 9% Atlantic City luxury tax for movies and concerts.? ????High taxes? stopped many? businesses and events from coming to Atlantic City including the popular concerts at Bader Field.? On June 12, 2012, the Press of Atlantic City reported:? ?Two weekend-long concerts scheduled for September at Bader Field have been canceled, partially over the luxury tax levied on booze, hotel rooms and entertainment in the resort?.

?2006:?? Atlantic City?s monopoly on casino gambling in the East Coast effectively ends when Pennsylvania New York, and Maryland open new casinos.?? New Jersey?s 18 year experiment of Prosperity without Liberty comes to an end.

?2007:?? NJ Casino Control Commission denies license renewal to Tropicana Casino, and appoints receiverto run casino for next two years.?? It then appointed a retired NJ Supreme Court Justice to run the casino for the next two years.?? ?This effectively destroyed 90% of the owner?s $2.75 billion investment in the property and discourages other investors from building in Atlantic City.???? Former Atlantic City casino owner Steve Wynn publicly states it is much easier to do business in Communist China than in New Jersey.

2009-2013:??? Democratic Governor Jon Corzine assures Morgan Stanley (a Wall Street brokerage firm with no expertise in casino or hotel development) to continue construction of its Revel Casino Hotel project, even though it only has enough money to build half the structure.??? When Corzine is voted out of office, new Republican Governor Christie together with Democratic State Senators Sweeney, Lesniak, and Whelan? adopt special legislation giving tax abatements and $400 million of state government backed loans to complete Revel Casino for total cost of $2.6 billion.??? State government and union pension funds invested in the project.?? State and local governments borrow millions to build new roads and change the neighborhood to benefit the Revel Casino.

Revel? Casino opens in 2012, and defaults on its loans and files for bankruptcy one year later.???? Because of high cost of taxes, permits, electric bills and lawsuits in New Jersey, it is almost impossible for any major private business to succeed without a ?public-private partnership??massive tax exemptions, financing, guaranteed contracts, or other special deals from the government.

?2009-2014:?? Taxable value of real estate in Atlantic City declines from $20.5 billion in 2008 to $12 billion in 2013.??? Yet the cost of operating public schools, county government, and local government in Atlantic City continued to increase.?? In 2012, NJ State government allowed Atlantic City to borrow $103 million over the next 20 years to meet its current expenses, rather than cut spending or raise taxes.?? Because county, local, and public school spending, and debt ?increased in 2014, Atlantic City taxpayers are facing a 47% increase in 2014.??? The Sands Casino closed in 2006, and was demolished in 2007.?? The Atlantic Club Casino closed in January of 2014.???? The Showboat Casino will close at the end of August, 2014.?? The Revel Casino announced it will close at the end of the summer of 2014 if it does not find an buyer or investor.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top