New Jersey Going Forward With Casino Tax Cuts

• New Jersey legislators are moving forward with S4007 after the New Jersey Budget and Appropriations Committee approved the bill on Monday.
• The bill would reduce the required payments from casinos under the PILOT arrangement and prevent the use of sports betting and online gambling revenue in tax calculations.

ATLANTIC CITY, N.J. – New Jersey lawmakers are going forward with a set of tax breaks aimed at the gaming and casino industry in the state after the state Budget and Appropriations Committee approved the measure at a hearing Monday. Supporters of the tax break say they are necessary in order to keep several establishments from closing their doors permanently.

The bill, S4007, contains two primary facets:

The first, and most important, part of the bill would reduce the amount of yearly remittances paid by Atlantic City casinos instead of property taxes. This arrangement, called the PILOT (Payment in Lieu of Taxes) program, was passed in 2016.

The second aspect of the bill would eliminate online gambling and legal sports betting revenues from taxation calculations from 2021 through 2026.

According to the New Jersey Office of Legislative Services, the total PILOT payment for New Jersey’s casinos in 2022 could be as high as $209.6 million. If S4007 successfully passes, the payments are projected to be reduced to around $154.6 million. The office also projects a decrease in payments between $30 and $65 million each year through 2026, if S4007 passes.

High-Profile Proponents + Audible Opposition

Proponents of the bill argue that it is necessary in order to keep the New Jersey sports betting and casino industry operational.

New Jersey Senate President Steve Sweeney told the Budget and Appropriations Committee that four of Atlantic City’s nine gambling establishments are at risk of closing.

On the other hand, opponents of the bill have been just as vocal. Former Atlantic City Mayor Don Guardian spoke at the assembly against the new law Monday.

“The industry decided to gamble,” he said of the original PILOT bill. “Now, we know it was a bad bet. But we shouldn’t be paying for that bad bet.”

Peter Chen, an analyst at New Jersey Policy Perspective, believes it is “unnecessary” to alter the PILOT bill.

Chen’s remarks mirror the third-quarter net revenue report for Atlantic City’s casinos, which showed a 53.9% increase from the third quarter of 2020.

Though some of this increase can be attributed to the COVID lockdowns and measures of 2020, 2021’s third-quarter revenue is up 4.2% from 2019 as well, when casinos were fully open and operational.

News tags: Atlantic City | Don Guardian | Marty Small Jr. | New Jersey | New Jersey Budget And Appropriations Committee | New Jersey Office Of Legislative Services | New Jersey Policy Perspective | New Jersey Senate | Peter Chen | PILOT | S4007 | Steve Sweeney