Updated: May 1, 2013
A lot of people in New Jersey are betting that online wagering will be a game changer in Atlantic City, where casinos have been struggling for the past several years.
The owner of the online gaming company PokerStars is in the process of finalizing a purchase deal with Atlantic Club Casino Hotel. But there has been opposition to the deal, most notably from Las Vegas-based Caesars. [Note: The day after this interview aired, Atlantic Club COO Michael Frawley released a statement: “Our purchase agreement with PokerStars has been terminated in accordance with its terms.”]
Steven Perskie is the former chairman of the New Jersey Casino Control Commission and principal sponsor of the 1977 Casino Control Act which brought gaming to Atlantic City. Perskie tells Senior Correspondent Desirée Taylor that times have changed when it comes to meeting the standards for a gaming license in New Jersey. Thirty-five years ago, he said, an applicant with PokerStars’ background wouldn’t even have contemplated applying for a license.
“I don’t know what will happen to this application, I don’t what should happen, I don’t know whether any of the charges that have been in the newspapers and on television are true,” Perskie said. “But if they are and if they did succeed in getting a license, it would be a very different kind of experience than what we’ve had for the last 35 years.”
According to Perskie, the naysayers of online gaming fear that it will create harmful competition to existing casinos and “decrease or depress the volume of people that come to Atlantic City and to experience the gaming there.”
The other potential game changer in the casino industry centers around the possibility of sports betting in New Jersey. But the chances of that happening, said Perskie, is slim to none. Although he is in favor of it, Perskie said that it’s highly unlikely that Congress will amend the 1992 federal law that limits sports betting to four states — Nevada, Delaware, Oregon, and Montana.
“My own view as a lawyer [is] the legal challenges to that federal law are going to fail,” he said. “The only way we get sports betting is if Congress can be persuaded to amend the law, and at the moment, I don’t see that happening politically.”
Continuous revenue declines have painted a bleak picture of the state’s casino industry. But Perskie pointed out that the industry still employs thousands of people, while providing services to thousands of companies that benefit New Jersey. What Atlantic City needs is not more casinos, but more owners, according to Perskie.
“The original statute had a requirement that no licensee can hold more than three licenses, and the reason for that was to encourage competition and investment in the industry in New Jersey, ” he explained. “They repealed that some years ago and as a result, while we have 10 or 12 casinos in New Jersey, we only have 4 or 5 operators. And that’s a formula, in my view, that doesn’t work well for the people of New Jersey or for Atlantic City. If we had more operators here and more competition, we wouldn’t need more casinos. We would see more investment being made in the properties that we have.”