An obscure provision in a 2008 law might cause Atlantic City’s casinos to close during the New Jersey government shutdown.
The 2008 law was passed during the Corzine Administration to keep casinos from closing during a shutdown, but a clause in the law suggests that casinos might close 7 days after the government stops offering services.
Governor Chris Christie (pictured lower right) said he is having New Jersey Attorney General Christopher Porrino look at the 2008 law. State lawmakers are pointing fingers at each other over why the 7-day provision exists in the first place.
Meanwhile, the shutdown enters its third day.
2006 Casino Closures
During the 2006 government shutdown, Atlantic City casinos closed for 3 days. The closure of the city’s 12 casinos at the time cost the state $4 million and the casinos a great deal more.
July 2006 revenues were down 4.8% from year-to-year, while about half of the city’s 46,000 workers did not work on the days of the closure. Gaming analysts estimated those workers lost $8 million to $10 million in wages and salaries.
The casino closures happened, because New Jersey gambling regulators and inspectors did not work during the period. With no one to oversee the casinos’ operations, the gaming venues had to close for the sake of public safety.
2008 Casino Shutdown Law
Two years after the incident, the state’s leaders passed a law which would avoid such a loss of revenues again. Gov. Jon Corzine signed the new law, which allowed for Atlantic City casinos to remain open in the event of another government shutdown.
Lawmakers added a clause that stated casinos could close if the shutdown lasted 7 days or more. Now the question is whether the law requires the Atlantic City casinos to close their doors. If Christopher Porrino’s legal inquiry determines that the law requires full closure, then the Atlantic City casino industry might be the latest victim of the state’s budget impasse.
Jim Whelan on 2008 Casino Law
State Senator Jim Whelan, a Democrat from Atlantic City, said the seven-day provision never made sense. Suggesting that casino services are not the same as other non-essential services the state provides, Jim Whelan said, “We wanted it to be just: Don’t close the casinos. It doesn’t make any sense. You’re going to close a source of income that pays for itself?”
Sen. Whelan told NJ.com that he and others pushed for an open-ended clause in the 2008 law. He claims that short-sighted lawmakers wanted to limit the amount of time that casinos could operate without state supervision. In placing a 7-day limit in the bill, Whelan said the New Jersey State Legislature did “what we needed to do to get the bill through.”
Reason for New Jersey Government Shutdown
The current shutdown of the New Jersey governments is due to a budget showdown between Assembly Speaker Vincent Prieto (picture left), a Democrat from Hudson, and Republican Governor Chris Christie. The major point of contention involves Horizon BlueCross BlueShield of New Jersey, the largest medical insurance provider in the state of New Jersey.
Horizon is not a standard for-profit health insurance provider. Instead, it is the only not-for-profit “health insurance corporation“, which variously is described “as a charitable and benevolent institution“.
Besides providing affordable healthcare for many of New Jersey’s less affluent residents, Horizon paid $543 million in local, state, and federal taxes last year.
Christie’s Reform of Horizon
Gov. Christie wants a provision in the 2018 budget which would provide $300 million in funding for Charity Care and Medicaid. In his February budget address, Christie said he wants Horizon to “establish a permanent fund…through their abundant surplus…to support our most vulnerable population”.
In particular, Christie wants to fund heroin and opioid addiction treatment in the state. Drug treatment has been a major part of Christie’s second term policies. Since February, he has pushed New Jersey lawmakers to pass a bill which would force Horizon to pay $300 million a year into drug treatment. New Jersey’s General Assembly and Senate balked at the proposed policy.
Sweeney Critical of Prieto, Horizon
New Jersey Senate President Stephen Sweeney (picture top right) eventually relented and said he would support Gov. Christie’s measure. Vincent Prieto, Speaker of the General Assembly, is holding the line against Christie’s reforms.
In recent days, Stephen Sweeney has been outspoken in his criticism of Vincent Prieto. Sweeney, who represents the southern part of the state most affected by a potential casino shutdown, said this past weekend, “They really want to shut the casino[s] down, Horizon, by not wanting to talk to us?”
Speaker Prieto and Bob Morino, CEO of Horizon, agreed to meet with Stephen Sweeney on Monday at 1 pm, to discuss a compromise. If the impasse cannot be ended, then Atlantic City casinos might close, due to the New Jersey government shutdown.
