New Jersey lawmakers are proposing to renew a bill that would provide financial relief for Atlantic City casinos trying to recover from losses as a result of the COVID-19 pandemic.
The bill was renewed Monday by a state Senate committee and would exempt two of the industry’s fastest-growing revenue streams from tax calculations on how much casinos would have to pay to the city.
The latest version of the bill, sponsored by outgoing Senate Speaker Steve Sweeney, would exempt Internet gambling and online sports betting revenue from tax calculations.
The bill would require casinos to pay Atlantic City in lieu of taxes, and should reduce costs from some casinos such as Borgata but lead to increased payment amounts for some casinos such as Hard Rock.
The bill was first implemented five years ago, when five of the city’s 12 casinos were closed. Atlantic City currently has nine casinos, which under the new bill should see a lower total tax payout of $110 million per year, instead of the previous $120 million.
The bill is seeking approval from the full Senate and has not been acted upon in the Assembly.
For more reporting from the Associated Press, see below.
Simply back to show that their businesses were undervalued in a falling market, casinos successfully appealed their property tax assessments year after year, helping to blow a huge hole in Atlantic City’s budget.
The pay in lieu of tax bill, known as the pilot, was enacted to give casinos and the city some certainty about their finances by preventing gambling halls from appealing their tax assessments.
“Pilot Bill has really saved Atlantic City,” said Joe Tyrrell, a regional vice president at Caesars Entertainment, which owns Caesars, Harrah’s and Tropicana in Atlantic City. “Without the pilot, you wouldn’t have had Hard Rock open, you wouldn’t have reopened Revel as Ocean. The casinos were appealing their taxes.”
The bill would give big discounts on payments to some of the city’s most successful casinos, including its top performer, Borgata.
According to data obtained by the AP that is not described in the law, Borgata’s payments will drop from $29 million this year to $22.8 million in 2025.
Caesar will grow from $17.5 million this year to $9.3 million in 2025; And Harrah will grow from $25.6 million to $17.8 million.
Hard Rock, on the other hand, will see its pilot pay more than double from this year’s $7.7 million to $15.9 million in 2025. Tropicana will go from $8.3 million to $11 million; Bally’s will increase from $5.3 million to $7.7 million; Golden Nugget will go from $4.8 million to $6.2 million; Oceans will go from $7.5 million to $11 million, and Resorts will go from $3.5 million to $8 million.
The bill does not affect the significant state taxes casinos must pay on Internet gambling revenue (15 percent) and online sports betting revenue (13 percent), nor a 9.25 percent tax on individual casino revenue.
State Senator Troy Singleton, chairman of the Senate Community and Urban Affairs Committee, said of the removal of Internet and sports betting revenue from calculations on how much casinos should pay to the city and county given the rapid growth of both categories. They have serious concerns.
In the first nine months of this year, internet gambling generated nearly $1 billion, up 44 percent from the same period a year ago. Income from sports betting—more than 80 percent of which comes from online betting—accounted for $557 million, a 150 percent increase over the same period.
But casino executives argue that they should share a significant portion of their online winnings with tech and other partners, and that it is unfair that they bear the full tax liability of money that is only partly theirs to keep. .