Financial relief may be on the way for Atlantic City casinos

The Atlantic City casino industry has been hit hard by the COVID 19 pandemic. However, tax relief may be on the way for the land-based casinos, which have been closed since mid-March.

The Assembly Budget Committee recently voted 9-0 in favour of a bill that would give the casinos relief from certain fees and taxes. For example, the Atlantic City casinos would not have to pay a $3 daily fee for occupied hotel rooms. On top of that, the taxes for gross revenue (8.5%) and investment alternative (1.25%) would be decreased for a period of two full years after the casinos reopen, which New Jersey Governor Phil Murphy hinted may happen on the upcoming Fourth of July weekend.

The reduced taxes would be based on the gross revenues the casinos made in the same month of 2019. The size of the reductions would decrease when the casinos start to see revenues that are close to those of the previous year.

It has been estimated by New Jersey officials that the relief would save the casinos around $66 million from fees and taxes associated with slots, parking, hotel, and tourism through the 2022 fiscal year.

The Assembly Budget Committee voted 9-4 on another bill that deals with quarterly payments rather than taxes for May 1 and August 1. For this bill, money from the state’s Property Tax Relief Fund would be available to casino property owners or licensees as short-term loans. The loans would be interest free provided they are repaid within three years.

In the short term, the bill would cost New Jersey around $75 million. Republicans are the minority in the New Jersey Senate and Assembly, and it was they who cast the four votes against the bill. Assembly Majority Leader Louis Greenwald, a Democrat with well-documented concerns about the viability of Atlantic City casinos going forward, introduced both of the aforementioned bills. Governor Murphy has also been vocal about giving the Atlantic City casinos relief, dubbing them the “crown jewel” of the Garden State.

State lawmakers also voted on a third bill that proposed issuing $5 billion in emergency bonds because of the pandemic. Usually, the New Jersey Legislature passes the state budget by the end of June, as in the following two months there is very little legislative voting. With the end of June only a few weeks away, quick passage of the bills would be needed. However, in his chamber, New Jersey Senate President Steve Sweeney put forth companion legislation.

In the first quarter of this year, there was a 65.4% decrease in gross operating profits for the nine land-based casinos in Atlantic City despite the fact they were open for 11 of the 13 weeks recorded. Total gambling revenue for April came to $82.6 million, with $80 million from online casino gambling and $2.6 million from sports betting. In April of 2019, the online casino and sports betting revenue was $57.8 million, while the land-based casino revenue was $207.6 million.

Show More
Leave a Reply

Your email address will not be published. Required fields are marked *