State Casinos Pay New Jersey Tracks to Block Slots
Atlantic City casinos have been hit hard by economic conditions and increased competition, but the industry struck a deal this week with state racetracks to prevent new entries into the casino game from further hurting business.
After negotiating for more than a year, New Jersey racetracks have agreed with the casinos on a pact that will prevent the installation of video lottery terminals at the tracks. In return, the casinos promised to pay the tracks $90 million over the three years the deal is binding.
State lawmakers had debated whether to place the slot-style machine at the tracks until Governor Jon Corzine signed a law placing a three-year moratorium on the terminals, while requiring the casinos to help the tracks survive.
Slot parlors opening in surrounding states have played a large part in causing revenue to decline in Atlantic City. The town's eleven casinos reported a drop of 6.1 percent this year compared to 2007.
In return for aiding the ailing track industry, the state granted the casino limited tax breaks on comps and promotional expenses.
