May 27, 2024

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New Jersey governor signs aid bill for Atlantic City casinos | Health/Fitness

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TRENTON, N.J. (AP) — New Jersey Gov. Phil Murphy signed a bill Tuesday night that will give tax relief to Atlantic City’s casinos — and possibly prevent the closure of as many as four of them.

The action by the Democratic governor hands the casinos long-sought relief from an existing law that allows them to make payments in lieu of property taxes to Atlantic City, Atlantic County and the school system.

The bill scales back large increases in such payments the casinos would have had to make next year.

The state Legislature passed the bill Monday.

Steve Sweeney, the outgoing Democratic president of the state Senate, has said that as many as four of Atlantic City’s nine casinos would be in danger of closing if the bill had not been passed and signed into law. He has offered little evidence for the statement, and no casino has publicly made that claim.

The Casino Association of New Jersey said in a statement Tuesday that the measure “will protect thousands of jobs and provide certainty and stability to the market.”

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It was intended to help the casinos recover from the coronavirus pandemic by reducing large increases in payments in lieu of property taxes that would take effect if the bill is not passed.

The casinos will still pay more to the city, county and schools next year even if the bill is enacted; it just reduces the amount of the increase.

The casinos collectively expect to pay about $10 million to $15 million more next year if the bill passes. Without it, they say, their payments are due to rise by 50%.

Revenue figures reported by the state show the casinos’ overall numbers continuing to rise this year. But the casinos say those figures paint a distorted picture of their true financial condition by including money from internet gambling and sports betting with the money won from in-person gamblers.

Online and sports betting money must be shared with third party providers like technology platforms and sports books.

That is one big reason the bill excludes those two revenue streams — the fastest growing in Atlantic City’s casino industry — from calculations on how much the casinos must pay in lieu of taxes.

The casinos say their core business — winning money from in-person gamblers — is down significantly from 2019, the year before the pandemic hit.

While the two newest casinos, Hard Rock and Ocean, have seen their in-person revenue increase since 2019, the seven other casinos are down a collective 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 from the closure of five of its 12 casinos.

Easily able back then to show that their businesses were worth less in a declining market, the casinos successfully appealed their property tax assessments year after year, helping to blow huge holes in Atlantic City’s budget. The law prevented them from appealing in return for the certainty of knowing what their financial responsibilities would be for years to come.

The bill does not affect the state taxes casinos must pay on internet gambling revenue (15%) and online sports betting revenue (13%), nor the 9.25% tax on in-person casino revenue.

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