The proposed Senate Bill 4007 would reduce payments in lieu of taxes – or PILOT – that the nine gambling halls make to Atlantic City, the local school district and the county. It would also remove internet gaming revenue from the calculations.
Lawmakers sent the bill to Murphy’s desk late on the evening of Dec. 20, following a nearly 12-hour voting session where Republicans employed filibuster-like tactics in protest of a rule requiring members to show proof of COVID-19 vaccination or a negative test at the statehouse.
He signed it less than 24 hours later.
Under the measure, casino PILOT payments would fall by $55 million next year, and between $30 million and $65 million each year through 2026, according to a report from the nonpartisan New Jersey Office of Legislative Services.
The governor said on Monday that “the approach, the notion, the direction” of the proposal “conceptually are all good.”
Opponents argue that the relief is unnecessary and would starve the Atlantic City area of vital resources.
Take me to the PILOT
After more than a year of pandemic restrictions, New Jersey’s casinos and three racetracks brought in a combined $4.3 billion of revenue, driven mainly by internet gambling. Through November, online wagering was up by 68.7% over the first 11 months of 2020 and 34% from the same period in 2019.
“I do not believe Atlantic County taxpayers are being treated fairly with this new legislation,” said Sen. Vincent Polistina, R-2nd District, who represents Atlantic City. Don Guardian, the mayor of Atlantic City during the 2016 state takeover – when the PILOT agreement was put in place – and an incoming Republican Assemblyman for the area, also testified to lawmakers against the measure.
Outgoing Senate President Stephen Sweeney, D-3rd District, a sponsor of the bill, said the industry needs the relief because of the financial uncertainty bred by the pandemic and new variants. As many as four casinos could close, he said, though neither Sweeney – nor anyone in the industry – has specified which properties are in danger.
“This helps enormously,” Sweeney told reporters. “Things are getting worse, not better, unfortunately.”
In-person gambling at the city’s two newest casinos – the Hard Rock and Ocean Casino Resort – has been strong, but industry executives say they are outliers. Revenue at the other seven casinos from in-person gambling has fallen by 22% since 2019, according to the Casino Association of New Jersey.
“Failure to pass the PILOT legislation will have a further detrimental impact on the land-based casinos, which are still recovering from this unprecedented pandemic,” CANJ said in a statement last week.
Lawmakers first enacted a PILOT agreement in Atlantic City in 2016, after five of its 12 casinos closed, pushing the city to the brink of bankruptcy.
Another measure that Murphy approved on Dec. 21, S3994, would temporarily modify some of the taxes and credits for casinos licenses, and change the state’s promotional gaming credits to include coupons and table game wagers.[/vc_column_text][/vc_column][/vc_row]