New Jersey's Bill S-1866 Permits the Construction of "Boutique" Casinos

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In a boost to New Jersey's casino and tourism industries, the state has enacted three new laws, and a fourth bill is pending before New Jersey Gov. Chris Christie. Links to additional Alerts summarizing the other pieces of legislation follow this piece.

On January 5, 2011, N.J. Gov. Chris Christie signed into law S-1866, officially establishing alternative methods of casino licensure in Atlantic City. This bill is known as the "boutique" casino bill because it permits the construction of casino-hotels smaller than the current statutorily mandated 500-room minimum.

Under the bill, the Casino Control Commission (the "Commission") will establish a pilot program to, upon application, issue two additional types of casino licenses: a small-scale casino facility license and a staged casino facility license, although at least one of the new licenses has to be a staged casino facility license. Each of the licenses must go to a newly constructed facility originating in the beach block in the Boardwalk casino zone. Also, each licensee has to annually deposit 5 percent of gross revenues into a nonlapsing fund administered by the state treasurer. These funds can be used by the licensee to expand the number of hotel rooms in its facility, but must be used for this purpose within five years of licensure. Otherwise, the funds are used for infrastructure improvements in Atlantic City or can be loaned to fund capital expenditures by existing casinos in the Boardwalk casino zone or the licensees.

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