Video Lottery Decreases Casino Profits
1st November, 2007
The research has been conducted into the effects of placing video lottery terminals (VLTs) at horse racing tracks. The research was done at the Meadowlands, Monmouth Park and Freehold Raceway.
The tracks do not have enough financial resources to survive, so adding terminals would really boost their profits. Nevertheless, such action will directly affect the Atlantic City Casinos that are already suffering from the competition from other states. The estimated effect of building 6,300 terminals on the Atlantic City casinos would be around 2% deduction in profits.
When asked about the report, after the bill was signed in Hamilton, Governor Jon S. Corzine had this to say: "It's showing that at least with that level of VLTs put into the racetracks, we would have a hard time having that be the solution to the horse racing issue. It really points out we have other responsibilities with those resources as well, not just to horse racing. So it's a helpful view, but it's not the only view."
The report clearly states that there is a direct effect of adding VLTs to the horse racing tracks: “VLTs at New Jersey racetracks would not be the only, or even the most significant, factors impacting Atlantic City casinos, but they would have impacts on Atlantic City casinos."
Atlantic City casinos already have to deal with increased competition due to the new casino racetracks in Pennsylvania and New York.
On the other hand, Atlantic City racetracks have seen declines in wagering, purses and attendance. This tendency is not expected to change. The tracks will not be able to survive for much longer, as they need renovation due to their age and condition.
This is a difficult question and the decision made would have to either hurt casino or racetrack revenues.
