ATLANTIC CITY - Once held up as a national model, New Jersey's casino regulations are now being compared to an "antique car" by the man who wants to overhaul them.
Regulatory reform is a key piece of Gov. Chris Christie's plan, unveiled Wednesday, to reinvigorate an industry mired in a four-year revenue slump and hammered by competition from casinos in surrounding states.
However, one gaming expert cautioned Christie about tampering with a system that other states and countries have copied as they have followed New Jersey into the casino gambling business.
"It's 1,000 percent a national and international model," said Jim Wortman, a former Atlantic City casino executive who now serves as the director of gaming and research at the University of Houston.
Wortman added that New Jersey's regulations have become known as the "Ralph Nader of the casino industry," a tribute to the strict protection they give to gaming customers.
Fearing an outright overhaul more than some tweaking here and there, Wortman warned that New Jersey could now be headed toward a regulatory system that more closely resembles the less-onerous one in Las Vegas.
"If it ain't broke, don't fix it, regulatory wise," he said. "If we want to go to a Las Vegas model, do we actually want the Las Vegas model? This is the state that legalized prostitution."
But what does regulatory reform actually mean? What is Christie's vision for modernizing a system he says is rooted in the 1970s - an "antique car," he called it - and has outlived its usefulness?
"I'm not sure what he wants to do," said Linda M. Kassekert, chair of the New Jersey Casino Control Commission, the chief regulatory body for Atlantic City's $3.9 billion gaming industry.
"I don't have an answer to that," said state Sen. Jim Whelan, D-Atlantic.
Christie spoke about his desire to change the regulations during a news conference Wednesday, but didn't offer specifics. Slightly more details of his plan were contained in a governor's advisory report that serves as Christie's blueprint for boosting Atlantic City's casino-dominated tourist economy.
Recommendations include combining the functions of the CCC and the Division of Gaming Enforcement, the state agencies that oversee the casino industry. The DGE, now primarily an investigative agency, would become the main regulatory body. The commission would assume more of a "judicial function" by concentrating on issuing casino licenses instead of regulating the day-to-day activities of the industry, the report recommended.
Regulatory reform could ultimately save between $15 million and $25 million annually, the report said. Those savings would be channeled into a new fund to help upgrade and market Atlantic City as a tourist destination.
Both Kassekert and Whelan indicated Thursday they are receptive to the idea of changing the regulations to help the casino industry, as long as it doesn't harm the integrity of the system.
"As a former prosecutor and U.S. attorney, the governor understands the system of checks and balances, and that's what the process calls for," Kassekert said. "The other thing we talk about is integrity. I think we have a process that gives confidence to the casinos and to the customers who come to the casinos, ensures that the games are fair and that the state is watching."
Whelan maintained the casino business has long shook its former Las Vegas reputation as a haven for organized crime. Technological changes in the slot machines and more sophisticated surveillance methods should allow Atlantic City to operate with a less-intrusive and costly regulatory structure, he said.
"We still want to be vigilant in making sure there are no monsters running the casinos, but that is so much less of an issue than in 1977 and 1978, when the casino era began in New Jersey," said Whelan, a former Atlantic City mayor.
Whelan said lawmakers, working with Christie's office, will develop specific proposals for reforming the system as part of the legislative process. He added he "is not wedded" to any particular model, but insisted that changes must be made.
"I just know we need to do a more efficient job of regulating the casinos because we are the most expensive and, by the casinos' account, the most cumbersome regulatory process in the country," he said.
As one possible change, Whelan mentioned ending the requirement to have state gaming inspectors on the job 24 hours a day. There are 151 gaming inspectors, making up more than half of the Casino Control Commission's 273-member work force.
The commission has been shrinking over the years. In 1990, it had about 500 employees. Its $24.4 million operating budget for the current fiscal year is down 17 percent from $29.4 million in 2008 and 2007, the agency said.
Kassekert said she is open to "constantly re-examining" the regulations to ensure the casino industry operates efficiently. She noted the commission continues to review and approve items from a "wish list" of regulatory changes compiled by the casinos.
Mark Juliano, who serves as both the chief executive officer of Trump Entertainment Resorts Inc. and the president of the Casino Association of New Jersey, could not be reached for comment Thursday about Christie's plan. Other Atlantic City casino executives also were unavailable for comment.
"The casinos are very reluctant to talk about this publicly," Whelan said about regulatory changes. "These are things people say to me in private. They don't want to say it publicly because they don't want to tick off the regulators."
Keith Smith, chief executive officer of Boyd Gaming Corp., parent company of Borgata Hotel Casino & Spa, testified June 24 during Borgata's licensing hearing that the casinos and New Jersey gaming regulators have spent the past 21/2 years discussing ways to reduce costs and make the system more efficient. He argued against sweeping changes, fearing they could jeopardize the system's integrity.
"New Jersey is viewed as one of those gaming markets with a high degree of integrity, which - I hate to keep repeating ourselves - but it is one of the reasons we're here and one of the reasons we are comfortable operating here. ... And so, wholesale change? Absolutely not," Smith testified.
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