A bill that would change how Atlantic City casino property taxes are calculated garnered a strong response from Atlantic County Executive Dennis Levinson. Assemblyman John Armato (D-Atlantic) says he will go back to the legislative drawing board as a result.
Assembly Bill 5587 is designed to assist Atlantic City’s nine casinos in the wake of COVID-19. The legislation would exclude gross gaming revenue (GGR) derived from online gaming and mobile sports betting from the PILOT program.
PILOT — the payment-in-lieu-of-taxes bill that was passed in 2016 and set to run 10 years — affords casinos the right to pay property taxes based on their annual GGR. The program was initiated in response to casinos challenging their assessed resort values in the wake of the Great Recession and five casinos closing between 2014 and 2016.
PILOT mandates that the casinos pay $120 million annually in state and local property taxes. That number increases as casino revenue climbs.
Casinos Benefit at Taxpayers’ Expense
Levinson was quick to respond to AB5587. The longtime Atlantic County executive says Armato’s bill would hurt local residents, and they, too, endured a most difficult 2020.
It will benefit the casinos at the expense of the non-casino taxpayers by removing a huge and steadily increasing portion of the revenues,” Levinson declared. “The loss in property tax relief could be millions of dollars.”
Armato said he heard Levinson’s concerns, and will rework the bill.
“As anyone who understands the legislative process knows, you introduce a piece of legislation, debate and discuss it, then you take the result of those conversations into consideration when deciding how to move forward,” Armato explained yesterday. “This is called governing responsibly.”
Levinson says that’s a bunch of nonsense.
“Why would you introduce a bill that’s nowhere near what they want? They got caught. Nobody was supposed to see this. They were going to push it through and get a quick vote,” Levinson contended.
Brick-and-mortar casino revenues were devastated by the coronavirus. Slot machines and table games at the Atlantic City casinos won $1.5 billion last year — down 44 percent from 2019.
iGaming, meanwhile, flourished. GGR from interactive slots and tables more than doubled to $931.5 million. Fees from poker games climbed 85 percent to $38.8 million. Sportsbooks won $398.5 million from bettors. And the vast majority — over 90 percent — was generated online.
Profits for the nine casinos plunged more than 80 percent last year. It would have been far worse if not for their online operations.
Casinos, however, point to the fact that they don’t keep nearly as much of the online GGR as they do from brick-and-mortar play. Casinos share profits from internet gambling and sports betting with their third-party operators.
Hard Rock Atlantic City President Joe Lupo opined recently that New Jersey should change the way casinos report their GGR.
“We need to see the city revitalized, and it’s not going to happen when the media is reporting [GGR] increases when they add in online revenue that is going to third-party companies that don’t have a stake in the [Atlantic City] game,” Lupo stated.
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