TRENTON, NJ – New Jersey Gov. Phil Murphy signed a bill on Tuesday night that will give Atlantic City casinos tax relief – and possibly prevent four of them from closing.
The Democratic governor’s action gives casinos long-awaited relief from an existing law that allows them to make payments in lieu of property taxes in Atlantic City, Atlantic County and the school system.
The bill reduces the large increases in these payments that casinos should have made next year.
The state legislature passed the bill on Monday.
Steve Sweeney, the outgoing Democratic president of the state Senate, said up to four of Atlantic City’s nine casinos would be at risk of shutting down if the bill had not been passed and enacted. He provided little evidence for this statement, and no casino has publicly made this claim.
The Casino Association of New Jersey said in a statement Tuesday that the measure “will protect thousands of jobs and bring certainty and stability to the market.”
It was intended to help casinos recover from the coronavirus pandemic by reducing the significant increases in payments in lieu of property taxes that would take effect if the bill were not passed.
Casinos will still pay more to the city, county and schools next year even if the bill passes; it just reduces the amount of the increase.
The casinos collectively expect to pay around $ 10 million to $ 15 million more next year if the bill passes. Without it, they say, their payments would have to increase by 50%.
Revenue figures reported by the state show that the total number of casinos continues to increase this year. But casinos say these numbers paint a distorted picture of their true financial situation by including money from internet gambling and sports betting along with the money earned by players in person.
Money from online and sports betting should be shared with third party providers such as technology platforms and sports betting.
This is one of the main reasons the bill excludes these two sources of revenue – the fastest growing Atlantic City casino industry – from calculations on how much casinos have to pay instead. taxes.
Casinos say their core business – making money from players in person – is down significantly from 2019, the year before the pandemic began.
While the two most recent casinos, Hard Rock and Ocean, have seen their in-person revenues increase since 2019, the other seven casinos have collectively fallen 22% since then, according to the Casino Association of New Jersey.
The first version of the bill was passed five years ago, when Atlantic City was reeling over the closure of five of its 12 casinos.
Easily able at the time to show that their businesses were worth less in a declining market, casinos have successfully appealed their property tax assessments year after year, helping to drive huge holes in the budget. Atlantic City. The law prevented them from appealing in exchange for the certainty of knowing what their financial responsibilities would be for years to come.
The bill does not affect the state taxes that casinos must pay on Internet gambling income (15%) and online sports betting income (13%), nor the tax of 9 , 25% on income from in-person casinos.
Follow Wayne Parry on Twitter at http://twitter.com/WayneParryAC
Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.