Atlantic City casinos are set to receive tax relief, thanks to a new bill signed into law by New Jersey Governor Phil Murphy on Tuesday. The bill was created to provide relief from an existing law that allows casinos to make payments instead of paying property taxes to the city, county, and local school system. Lawmakers pushed the bill forward, in an attempt to provide further relief as casinos try to recover amidst the COVID-19 pandemic.
The new law will scale back a large increase in payments that the casinos must make in 2022. The bill was passed by lawmakers on Monday and only needed Murphy’s signature to move forward. According to the bill sponsor, Senator Steve Sweeney, the measure will help four of the nine casinos stay open, as some were in danger of closing down if the bill had not passed into law.
While Sweeney pushed this point, no evidence was provided to back up the statement. Not a single casino came forward with information that this would happen if the tax bill was not approved.
The Casino Association of New Jersey is happy with the outcome, stating the law will now protect jobs in the city as well as provide stability to the gaming market. The Atlantic City casinos have already been trying to recover from the COVID-19 pandemic and having to pay large amounts next year would have slowed down the recovery process.
What’s to Come?
The New Jersey casinos will still make payments next year and the amount will be high, but the amount of the increase is lowered. The casinos are expected to pay a total of $10 million to $15 million more in 2020. If the measure had not passed, the casinos would have seen a 50% increase in the amount owed.
Revenues suggest that the industry is in recovery. However, casinos say that the figures are distorted when it comes to their true financial progress because they include online earnings from casino gaming and sports betting. These revenues must also be shared with third-party providers which cut down on the bottom line.
The recently approved bill excluded sports betting and online gaming from revenue totals due to the calculation of how much casinos pay in taxes. The casino’s core business is retail gaming and the earnings are down from 2019, right before the pandemic hit.
The hope is that players will continue to visit the region and the in-person spending amount will increase over time. With the new legal change, the casinos can breathe a sigh of relief as they will pay less than was expected, which will provide a buffer as the recovery process continues.