The Atlantic City casino industry could benefit from state legislation designed to bolster the bottom lines of sites that have been closed due to a worldwide pandemic since mid-March.
For instance, casinos would be exempt for the rest of 2020 from a hotel fee of $3 per day for each occupied hotel room.
Also, the gross revenue tax of 8% and the investment alternative tax of 1.25% would be reduced for two full years after the reopening of Atlantic City casinos — which could come on July 4 weekend
The amount of the tax reduction would correlate with a comparison of gross revenues from any month compared to that month in 2019, with the reduction growing smaller the closer a casino gets to regaining its previous revenue levels.
Casinos also would be permitted to deduct from their gross revenues figure any promotional gaming credits such as coupons — something currently only permitted after the first $90 million in such spending.
State officials estimate that casinos could save up to $66 million from reductions on slot machine, parking, hotel, and tourism fees through fiscal year 2022.
Loans headed casinos’ way?
A second bill, passed in the same committee Monday by a 9-4 vote
, concerns quarterly payments in lieu of taxes (PILOTs) for May 1 and Aug. 1. This bill would require the state treasurer to make funds available from the Property Tax Relief Fund to the owners or licensees of casino gaming properties as short-term, interest-free loans due to be paid in full within three years.
The bill would cost the state, in the short term, about $75 million. The four votes against it were cast by Republicans, who are in the minority in both the Assembly and the state Senate.
The state Legislature traditionally passes its budget by June 30, with little if any legislative voting taking place in July or August.
While that leaves only a few weeks for quick passage, state Senate President Steve Sweeney has introduced companion legislation in his chamber.
Pandemic impact on AC casinos
The nine Atlantic City casinos experienced a 65.4% drop in gross operating profits in the first quarter of 2020, from $85.7 million to $29.6 million. That drop came even while the casino floors were open for all but two of the quarter’s 13 weeks.
April’s revenues came in at $80 million from online casino play and another $2.6 million from those betting online on exotic sports around the world during the pandemic.
In April 2019, online casino and sports betting totaled $57.8 million, while the brick-and-mortar revenue was $207.6 million.
Atlantic City impacted by looting, too
Like most major U.S. cities, Atlantic City in the past week has featured both peaceful protests and scattered looting.
Police arrested 17 individuals Sunday night on a variety of charges, most of them city residents or from nearby communities.
The upscale Tanger Outlets was a particular target with nearly two dozen stores vandalized, including Tommy Hilfiger, Brooks Brothers, Nike, and Forever 21.
Mayor Marty Small Sr. reacted emotionally to the looting afterward.
“I’m ashamed, embarrassed, hurt,” Small said. “Media from around the world are calling me because of what happened in Atlantic City tonight.”
Small set a 7 p.m. curfew for the rest of the week.
Image provided by Shutterstock
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