Posted: May 11, 2021, 14: 48 hrs.
Last updated: May 11, 2021, 11: 14 h.
New Jersey's new legislation seeks to remove gross gaming revenue (GGR) generated online from Atlantic City casinos' annual property tax liability .
Assembly Bill 5587, introduced last week by Assemblyman John Armato (D-Atlantic), changed the state tax structure for casinos in Atlantic City. Now, casino GGRs from land-based and online operations are grouped together with respect to the Casino Property Tax Stabilization Act.
Passed 2014, the law guarantees the state at least $ 120 million annually from Atlantic City casinos. The Tax Stabilization Act was created in response to petitions from casinos requesting a reduction in their property tax liability as a result of the economic recession and declining casino revenues.
Value 2014 increases casino property taxes as GGR increases. For a GGR of $2.6 billion or less, casinos pay $120 million. This increases to $165 million if the annual GGR exceeds $3.4 billion.
Pandemic Powered iGaming
Armato believes that GGR generated online should not count towards tax liability.
Each of the nine land-based casinos works with interactive gaming providers for their online and mobile applications. They share revenue with such third-party companies, although they typically do not disclose their business arrangements.
"Gross gaming revenues means the total amount of revenues derived from casino gaming, including revenues from sports pool operations, from all casino gaming facilities located in Atlantic City, as broken down by calendar years 2014 through 2020," Armato's bill reads. "Gross gaming revenues do not include revenues derived from online casino gaming and sports betting in calendar years 2021 through 2025."
The division refers to the New Jersey Division of Gaming Enforcement (DGE), the state's gaming regulator.
The proposed tax change does not affect sports facilities at the Meadowlands, Monmouth Park and Freehold Raceway because those facilities were not part of the 2014 Atlantic City property tax scheme.
New Jersey's gaming industry has been severely damaged by the COVID-19 pandemic. Full-year GGR fell 43. 9 percent. DGE numbers show that nine casinos and two racetracks with sports betting won more than $2. 88 billion.
But traditional gambling at Atlantic City casinos fell nearly 44 percent. Slot machines won $833. 7 million less last year, and table game revenue fell 340. 3 million .
There is so much help that we really need with these properties " - said Joe Lupo, president of the Hard Rock Atlantic City WOND 1400 AM in January.
"We need to see a revitalization of the city, and that's not going to happen when the media reports growth when they add online revenue given to outside companies that have no stake in the [Atlantic City] game. "
While land-based gaming fell 43. 7 percent in 2020, iGaming GGR more than doubled. Online casinos won 970. 3 million from players, while $ won 482. 7 million more