Casino
| On 10 months ago

Atlantic City Casino Tax-Break Bill Advances

A version of a tax break for Atlantic City casinos was advanced by a 9-2 vote in a state Assembly committee on Monday, but it is less generous than a state Senate proposal that moved forward a week earlier.

Both bills, which are expected to face a full vote in Trenton next week once their language is reconciled, remove online casino gaming and sports betting revenue from the gross gaming revenue formula that sets a payment-in-lieu-of-taxes, or PILOT. The burgeoning revenue from those categories — which mostly benefits third-party operators, casino executives note — would otherwise lead to a $165 million obligation for the industry in 2022, according to the non-partisan Office of Legislative Services.

Under the Senate bill, that cost would shrink to $110 million, while the Assembly version targets that figure at $125 million. While most of the dozens of bills introduced by the Assembly Appropriations Committee on Monday were advanced without discussion or a dissenting vote, the PILOT bill was an exception.

Casinos booming, or in trouble?

Sue Altman, executive director of the New Jersey Working Families Alliance, on Monday reiterated concerns she recently expressed to a Senate committee about the bill.

“I don’t see the logic here. I don’t see why we would do it,” Altman said of the tax-break bills. “New Jersey’s tendency to give Atlantic City casinos whatever they want is problematic and very corporatist. I wish they would stop doing that. I’m sick and tired of big and profitable casinos paying less than their fair share in taxes.”

The bill received “no” votes from Assembly lawmakers Antwan McLellan and Kevin Rooney. Fellow Republican Jay Webber said he would wait to vote until he could review the bill further, and he subsequently voted for it by day’s end. Assembly committee Vice Chairman Gary Schaer, a Democrat, voted for the bill despite noting he has “concerns” about it. In last week’s state Senate committee vote, one Republican voted against the bill while three abstained.

Outgoing state Senate President Stephen Sweeney raised eyebrows last week when he declared that without the tax relief proposed in the bills, four of the city’s nine casinos might be forced to close.

“I do not want that to happen,” Sweeney said. “I don’t want to have a situation where it’s, ‘I told you that place was going to close, and it closed.’ I don’t want to get to say I was right.”

Echoes of 2014 still resonate

That warning was duly noted by several legislators who recall the devastation faced by Atlantic County when four casinos closed in 2014 and a fifth did so in 2016. Tens of thousands of jobs were lost, and the county often led the nation in home foreclosure rates in subsequent months.

On Monday, Sweeney was backed by a powerful ally in Bob McDevitt, president of Local 54 of the Unite Here union that represents the majority of casino workers.

“The choices in my mind are clear: Do nothing and risk the loss of thousands of jobs, or immediately pass this legislation and provide a foundation for stability and growth in the future,” McDevitt told The Associated Press. “I really do believe there will be closures. Spreading revenue around is like spreading peanut butter onto bread. You’re spreading the peanut butter thinner and thinner, and there’s still too much empty bread.” 

Image: Shutterstock

John Brennan

John Brennan has covered NJ and NY sports business and gaming since 2002 and was a Pulitzer Prize Finalist in 2008, while reporting for The Bergen County Record.