July 21, 2010 / 8:35 PM / 9 years ago

UPDATE 2-N.J. plans takeover of Atlantic City casino district

* Governor says gaming industry needs to be modernized

* Calls for sale or lease of Meadowlands horse track (Adds casino revenues)

By Karina Ioffee

EAST RUTHERFORD, New Jersey, July 21 (Reuters) - New Jersey Governor Chris Christie announced plans on Wednesday to seize control of Atlantic City’s gaming district, seeking to revitalize the gambling industry, prop up city finances and create a family-friendly attraction similar to Las Vegas.

The once-gleaming gambling mecca has deteriorated into an unsafe, dirty and corrupt dinosaur that has failed to adapt to increased competition and new industry standards, critics say.

Christie, a Republican who advocated budget cuts while campaigning for office last year, said the overhaul was necessary to lure tourists back to New Jersey and turn Atlantic city into “the Las Vegas East.”

“We have to make a renewed, bold commitment to Atlantic City,” Christie told a news conference. “We can’t afford for Atlantic City to go under with no opportunity for the state to participate in making it better.”

He did not say how much public money the plan would require.

The proposal also calls for the Meadowlands Racetrack in northern New Jersey near New York City to be sold or leased and to complete the accompanying Xanadu, a much-criticized, half-finished $2 billion entertainment and retail complex.

Atlantic City became a popular seaside resort in the 19th century know for its boardwalk, hotels and amusements. But its fortunes sank by the 1970s, prompting the state to approve gambling to reinvigorate the economy, with the first casino opening in May, 1978.

But in the last several years, revenues have fallen, and in 2009 Atlantic City’s 11 casinos grossed a total of $3.9 billion, the worst year in more than a decade, according to the Casino Control Commission.

In Atlantic City, the goal is to create a public-private partnership that would take over the convention and visitors bureau and Boardwalk Hall, an entertainment venue.

The plans were drawn up by a commission created by Christie in response to plunging revenue in Atlantic City, which has been hit hard by competition from new casinos in neighboring Pennsylvania, the recession, and the losses suffered by the horse-racing industry at the Meadowlands.

Christie’s plan must be approved by the Democratic-controlled state legislature. Christie said he hoped for legislative approval this autumn.

The plan has some support from state Democrats, who called it timely and much-needed.

“The commission’s vision for revitalizing Atlantic City is encouraging” said Democratic Senator Jeff Van Drew. “One thing we know is we can no longer use Band-Aid approaches in an attempt to heal a city suffering with a gaping wound.”

Other Democrats wondered how the public-private partnership would operate and who would pay for the investment.

“The one question every casino executive should be asked and be expected to answer is ‘How much additional capital are they prepared to invest as a result of a state takeover?,” said Senator Raymond Lesniak, a Democrat. He estimated the plan would require more than $1 billion.

“A state takeover of the casino district does nothing to infuse Atlantic City with the resources needed and allows Las Vegas, New York, Pennsylvania and Delaware to continue to take these resources from New Jersey,” Lesniak said. (Additional reporting by Jon Hurdle; Editing by Daniel Trotta and Philip Barbara)

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