Mr. Johnson goes to Trenton

Jim Johnson, left, special counsel for the Atlantic City transition, and Lt. Gov. Sheila Oliver testify before a legislate committee on their work in the resort.

TRENTON — Jim Johnson, former special counsel to Gov. Phil Murphy for the Atlantic City transition, is testifying for a review of existing casino regulations to a state Assembly committee Thursday.

Johnson, who was appointed New York City corporate counsel Oct. 31, is appearing before the Assembly Tourism, Gaming and the Arts Committee. He is joined by Catherine Brennan, deputy treasurer of the state Department of the Treasury, and William Irving of Rutgers University’s Economic Advisory Service.

Also testifying are Lt. Gov. Sheila Oliver and Atlantic City Mayor Marty Small.

A Rutgers University report presented Thursday to a state Assembly panel highlighted familiar and oft-proven themes: that the northeast U.S. casino market is saturated and that new casinos will hurt Atlantic City.

Johnson has suggested a cap on the number of casino licenses. The idea received support from several lawmakers.

“The trendlines suggest things are going to be down,” as new casinos continue to open in neighboring states, he said. “The Atlantic City casino industry is vulnerable to challenges from within, and competition from outside the state. The data is really stark.”

The Rutgers report predicted a casino due to open next year in Philadelphia’s stadium district with 2,000 slot machines could divert $63 million to $150 million in gambling revenue currently being spent in Atlantic City casinos.

The idea received support from several lawmakers.

Democratic Assemblyman Ralph Caputo panned a proposal to restore casino operations to the Showboat, which currently operates as a non-gambling hotel.

“That’s just a bad idea,” said Caputo, who is a former Atlantic City casino executive. He said AC’s overall gambling revenue has increased in the 15 months since two new casinos opened last year: Hard Rock, the former Trump Taj Mahal, and Ocean Casino Resort, the former Revel.

But the gross operating profit of the casinos has declined since the two new entrants joined the market.

Republican Assemblyman Ronald Dancer says there are only so many gambling dollars to go around.

Johnson's testimony was expected to "address steps being taken to ensure the casino industry is healthy and positively contributing to Atlantic City’s and the region’s community and economy," according to a news release from the state Department of Community Affairs, the agency with direct oversight of Atlantic City.

Thursday's testimony is Johnson's second appearance in front of the state Legislature in regards to casino gaming regulations. In June, he testified before a state Senate committee that a review of existing casino regulations, specifically as they relate to the number of licenses issued and overall market capacity, may be needed to ensure the long-term stability of the industry in Atlantic City.

Johnson told the Senate committee the state's efforts in Atlantic City to stabilize the resort's finances and improve the quality of life for residents could be undermined if the casino industry were to experience setbacks similar to those between 2014 and 2016, when five properties closed. The closings resulted in the loss of nearly 8,000 jobs and contributed to the region having one of the highest foreclosure rates in the country, he said.

Increased competition from nearby gaming jurisdictions — including Pennsylvania, Delaware and New York — cut into Atlantic City casino revenues beginning in 2007, and the industry spent nearly a decade attempting to recover. With gaming expansion in nearby states unlikely to stop, Johnson and others are concerned that any attempt to expand Atlantic City's market could have unintended negative consequences.

Irving will present a study on the risks facing New Jersey’s casinos.

Atlantic City has nine operational casino hotel properties after Hard Rock Hotel & Casino and Ocean Casino Resort reopened shuttered Boardwalk gaming halls last summer. Total gaming revenue has increased each month since the opening of the new casinos, but gross operating profits — widely considered measure of profitability for the industry — from the existing properties have suffered because of marketing and promotional allowances needed in order to compete in the market.

The Associated Press contributed to this report. This is a developing story. Check back for updates.

Contact: 609-272-7222

Twitter @ACPressDanzis

Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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