NATIONAL GAMBLING IMPACT STUDY COMMISSION

PETER VERNIERO, ESQ.

CHAIRMAN JAMES: I would like to offer the Commission's thanks to Senator Lautenberg for going to the extraordinary efforts to have his views brought before this Commission by way of a videotape.

It's now my pleasure to introduce our next panel of distinguished speakers, New Jersey Attorney General Peter Verniero, State Assemblyman Kenneth Le Fevre, and Atlantic City Mayor James Whelan, and Atlantic City's City Council President Rosalind Norrell-Nance.

On behalf of the Commission, welcome, and we look forward to receiving testimony from you, and I think we'll just go in the order that you all were introduced, and again, thank you for being here this morning.

MR. VERNIERO: Thank you very much.

Welcome, Chair Lady and Commissioners. Good morning, everybody. On behalf of Governor Whitman, I am pleased to welcome you to Atlantic City, New Jersey. Unfortunately the governor could not be here herself, but I would like to read a brief letter into the record.

CHAIRMAN JAMES: Thank you.

MR. VERNIERO: "Welcome to Atlantic City as you begin this first on-site meeting.

"New Jersey has been a leader in the casino industry, particularly in our strict regulation and enforcement. These efforts have helped us build a record of integrity in our casino industry throughout the past two decades. I hope you share the perspective of those of us in New Jersey that the casino industry has sparked great opportunity in the economy.

"Our casinos are responsible for 48,000 jobs directly and have had a secondary employment impact on all segments of the New Jersey economy.

"You will hear many stories over the next two days about the impact of gaming in Atlantic City and the State of New Jersey. The human side, however, should also reflect the Atlantic City residents who now have good jobs, the senior citizens who have increased pharmaceutical benefits, and other New Jersey residents who have benefitted from state financed programs.

"I wish you well in your work.

"Sincerely yours, Christine Todd Whitman, Governor."

As New Jersey's Attorney General, I am the chief law enforcement officer and legal advisor for the state. My responsibilities encompass oversight of nine divisions and numerous commissions and boards. Included among these responsibilities is my supervision of the Division of Gaming Enforcement, the body charged with maintaining integrity and trust in all casino gaming operations, and the New Jersey Racing Commission, the agency that has jurisdiction over the state's thoroughbred and harness track associations and racetracks.

Also in my department is the Legalized Games of Chance Commission. For our purposes today, however, my remarks will focus on the segment of the industry that comes to most people's minds when they think of gaming: casino gambling.

To that end I would like to briefly discuss the responsibility of government to insure the highest level of integrity in the system. First some background.

As you all know, New Jersey is now celebrating its 20th year of gaming operation. Prior to the introduction of gaming, Atlantic City, one of the East Coast's premier resorts at the turn of the century, was hurting. Many hotels were having financial difficulties and were forced into bankruptcy and ultimately closed. Tourists were no longer coming to this seaside town, and this had a devastating impact to the shore area. The city was in desperate need of help.

On November 2nd, 1976, everything changed. That was the day New Jersey voters passed a referendum legalizing casino gaming in Atlantic City. However, in New Jersey, and I suspect other gaming jurisdictions, the legalization of gaming did not come without carefully balancing the risks gambling poses against the contributions it can make.

To insure the highest level of honesty and integrity, the New Jersey Casino Control Act was passed in 1977. This is by far one of the most comprehensive gaming laws in the world, and it is often used as a model by other jurisdictions contemplating a regulatory system.

The goals were threefold and simple: to keep criminals out, to assure the integrity of the games, and to monitor the payment of taxes.

To accomplish these goals, the New Jersey casino law created a bifurcated regulatory system when it established the Casino Control Commission and the Division of Gaming Enforcement, two separate government agencies with responsibility for casino regulation.

The division was created as an arm of the Department of Law and Public Safety, the department which I lead, to investigate all prospective casino licensees. As a law enforcement agency, the division can access criminal and intelligence information throughout the nation and the world, and we do.

The other agency, the Casino Control Commission is a quasi-judicial body charged with issuing licenses and adopting rules and regulations. This dual regulatory responsibility touches all aspects governing casino operations and is fully mindful of the special law enforcement needs associated with casino gambling.

New Jersey has proven that this industry can be effectively regulated to attain our stated goals, and we are attaining them. Indeed, one major detriment of gaming was a preconceived relationship between the establishment of casinos and increases in crime.

The Division of Gaming Enforcement, working cooperatively with the New Jersey State Police, which is also in my department, the Atlantic City police, and federal authorities is vigilant in its enforcement of laws throughout the city. According to the state's most recent uniform crime statistics reports prepared by the New Jersey State Police, both violent crime and nonviolent crime in Atlantic City dropped in 1996 when compared with 1995.

More significantly, other statistics show that when adjusted for ever increasing visitor volume that crime is actually lower today then before the advent of casinos.

In 1977, prior to casinos the visitor adjusted crime rate was almost 70 crimes per 1,000 people. In 1996, this number dropped to fewer than 53 crimes per 1,000 people, a decrease of almost 25 percent.

Further, the visitor adjusted violent crime rate was approximately seven crimes per 1,000 people in 1977. That number had dropped to 4.5 by 1996, a decrease of more than 35 percent.

These are encouraging numbers, but they are just that, numbers. Behind these statistics stand a variety of successful programs and initiatives. Some you have heard about and others you will hear about today, and some you will have the chance to see first hand this week.

Indeed, I believe that this industry has made its mark on a once beleaguered city. Coupled with the integrity of gaming operations, we can point to many successes in Atlantic City.

In closing, I would advise that it is vital for any jurisdiction that permits legalized gaming to allocate sufficient resources necessary to insure that the casino industry is strictly monitored. We have in New Jersey. We have made a commitment to regulation and to law enforcement in this state that is second to none with respect to casino gaming. It's been a success, and I know it will be a success in the future.

Thank you for inviting me to appear before this Commission. You have important work to do, and I am honored by making these remarks to assist you in your tasks, and once again, on behalf of the governor of this state, welcome.

CHAIRMAN JAMES: Thank you.

COMMISSIONER WILHELM: If I might.

CHAIRMAN JAMES: Commissioner Wilhelm.

COMMISSIONER WILHELM: If I might, I'd like to make sure that you leave with us those crime statistics you were quoting.

MR. VERNIERO: Yes.

COMMISSIONER WILHELM: I suspect we're going to hear varying views on that subject in the next day and a half, and I'd very much like to have the statistics from the Attorney General of the state. That would be very helpful.

MR. VERNIERO: Certainly.

COMMISSIONER WILHELM: Thank you.

CHAIRMAN JAMES: Thank you. We will submit those, and they will be a part of our record.

Thank you.

COMMISSIONER WILHELM: Yeah, but I want to have them today and tomorrow though.

CHAIRMAN JAMES: Great.

MR. VERNIERO: I have copies, Commissioner. I'll drop them off.

COMMISSIONER WILHELM: Thank you.

CHAIRMAN JAMES: If I can ask staff to pick those up, make copies, and give them to all of the Commissioners, that would be good.