After last year winning a court case against overly high taxes that had been imposed on its Borgata Hotel Casino And Spa property by officials in Atlantic City, American casino giant MGM Resorts International has now reportedly reached a settlement that will see it receive less than half of the $165 million it is owed.
According to a report from The Philadelphia Inquirer newspaper, the agreement will see MGM Resorts International receive $72 million from the New Jersey city to cover all judgments and claims from 2009 to 2015 while the deal moreover prohibits the Las Vegas-based operator from pursuing similar tax appeals for 2013 to 2015.
Struggling with debts of over $500 million, Atlantic City had hoped to raise much needed cash by increasing taxes on its casinos. But, the move back-fired in court before November saw the seaside city of some 39,000 become the first municipality since Camden in 2002 to be placed under the direct control of the state.
The Philadelphia Inquirer reported that previous efforts to reach a deal overseen by state monitors, an Atlantic County Superior Court judge and the city itself had failed while the latest negotiations had been overseen by former United States Senator Jeffrey Chiesa.
“This settlement has been one of my administration’s priorities since Atlantic City’s fiscal crisis forced us to assume control of operations there in November,” read a statement from Republican governor Chris Christie. “The city administration, despite all the time and opportunity given to them, failed to accomplish the goal as they have with so many others.”
August saw MGM Resorts International pay Boyd Gaming Corporation around $900 million for sole control of the Borgata Hotel Casino And Spa while The Philadelphia Inquirer reported that the firm’s recent willingness to accept less than half of the money it was owed could be an attempt to ingratiate itself with state lawmakers in advance of possibly applying to develop further operations in Atlantic City or northern New Jersey.
However, John McManus, Executive Vice-President for MGM Resorts International, reportedly declared that the settlement was the right deal for all involved parties and in the best interests of its own shareholders because it will prevent future litigation.
“We have agreed to this reduced payment because we are committed to being a catalyst of Atlantic City’s strong and vibrant future,” read a statement from McManus.
Christie’s administration has yet to detail how the city intends to finance the $72 million payment to MGM Resorts International although The Philadelphia Inquirer noted that previous tax settlement cases with casinos had been funded through bond payments. Atlantic City had earlier suggested paying off some of its debts by selling its municipal airstrip, Bader Field, to its Atlantic City Municipal Utilities Authority but that plan was subsequently rejected by the state.