Posted on: December 14, 2021, 07:51h.
Last updated on: December 14, 2021, 10:17h.
The odds of Atlantic City casinos saving around $55 million in 2022 property tax payments continue to shorten. That’s as legislation that seeks to provide the gaming resorts with financial savings makes progress in the New Jersey capital.
Backed by lame-duck state Senate President Stephen Sweeney (D), a bill that would remove iGaming and online sports betting revenue from the casinos’ property tax calculation passed the Assembly Appropriations Committee yesterday 8-2.
The statute would effectively slash the casinos’ payment-in-lieu-of-taxes (PILOT) bill from $165 million to $110 million. A5587 and its identical Senate version A4007 now move to their respective chamber floors for full consideration.
The casinos argue that gross gaming revenue (GGR) derived from iGaming and online sports betting shouldn’t be included in the PILOT computation because much of that income is shared with the brick-and-mortar casinos’ third-party partners. The nine casinos contend that those entities are not invested in Atlantic City, and therefore that GGR shouldn’t increase their PILOT responsibility.
The current PILOT arrangement levies a property tax payment that is based on the previous year’s total GGR.
Potential County Tax Losses
Through 10 months of 2021, GGR from iGaming totals more than $1.15 billion. Sports betting income generated online is approximately $600 million. Eliminating the more than $1.7 billion online gaming revenue would allow the nine casinos to fall under a much-reduced PILOT tax bracket.
Not everyone is in favor of providing the nine casinos with such a substantial property tax break. One such critic is Atlantic County Executive Dennis Levinson, who says the PILOT effort will help casinos while hurting county taxpayers. Atlantic County receives 13.5 percent of the annual casino PILOT money.
“We are going to have to do what we’ve done all along — fight for taxpayers of Atlantic County,” Levinson told the Press of Atlantic City.
However, Levinson conceded that the county doesn’t seem to “have any recourse.” The county executive said the PILOT amendment will cost Atlantic County taxpayers a minimum of $5 million a year.
Critic Speaks Up
Only one person from the public spoke during the Appropriations Committee PILOT discussion. But Sue Altman of New Jersey Working Families, an independent political organization that fights for government policies that benefit the needs and values of working families, didn’t hold back.
New Jersey’s tendency to give the casino industry anything it wants is problematic,” Altman declared. “I am sick and tired of watching successful and profitable companies pay less than their fair share in taxes, especially in struggling cities.”
Assemblyman Vince Mazzeo (D-Atlantic County), who chairs the State and Local Government Committee, refused to take up the PILOT bill when it landed in the committee. As a result, the legislation was moved to Appropriations for action.
Mazzeo opined that such an effort will result in fewer tax dollars for the county. He concluded that “it was a bad bill for Atlantic County.”
Sweeney has claimed that as many as four Atlantic City casinos are in peril of closing without a property payment reduction. But the longtime state lawmaker, who was shockingly defeated during the November election by a little-known Republican challenger, has refused to provide any insight to that claim.