Atlantic City Casino Property Relief Bill Shadowed By Threat of County Lawsuit

Posted on: December 17, 2021, 12:56h. 

Last updated on: December 17, 2021, 09:31h.

Atlantic County officials are preparing to bring a lawsuit against the State of New Jersey. That’s if lawmakers pass legislation to lower the amount of property taxes the nine casinos in Atlantic City are required to pay in 2022.

Atlantic County Threatens Lawsuit Against New Jersey if Atlantic City Casino Property Relief Bill Passes
Atlantic County Executive Dennis Levinson speaks at a community event in 2019. Levinson says efforts to reduce property payments for Atlantic City casinos are bad for county residents. (Image: Shore Local News)

Atlantic County, home to the resort town, receives 13.5 percent of the payment-in-lieu-of-taxes (PILOT) that the Atlantic City casinos pay each year.

The PILOT arrangement — reached between the casinos and New Jersey in 2016 in response to five casinos closing between 2014 through that year — determines how much the resorts will collectively pay in taxes. It’s based on the prior year’s total gaming revenues kept by the casinos.

A current effort in the Trenton capital seeks to remove iGaming and online sports betting revenues from the calculation. If the legislation passes and is signed by New Jersey Gov. Phil Murphy (D) — the governor expressing support for the measure — Atlantic City casinos’ 2022 property tax liability would be slashed from around $165 million to $110 million.

County Opposition

Longtime Atlantic County Executive Dennis Levinson has been at odds with state officials ever since the PILOT was first passed. He says efforts to further assist the casinos will come at the expense of county taxpayers. Levinson said this week that if the PILOT amendments pass, the country will be ready to sue the state.

The nonpartisan New Jersey Office of Legislative Services (OLS) forecasts that removing iGaming and internet sportsbook revenue from the property tax calculation will save the casinos $30 million to $50 million annually through PILOT’s 2026 termination. That’s along with the estimated $55 million in savings in 2022,

Levinson believes the casinos and state should uphold the terms they agreed upon in 2016. The New Jersey Assembly and Senate are expected to take up the PILOT bills on Monday.

OLS projects that if the PILOT structure is revamped, Atlantic County will receive $17.5 million next year instead of about $20.8 million. Levinson says in the years ahead, the county’s approximately 270,000 residents should expect the county to miss out on a minimum of $5 million annually.

The proposed changes to the PILOT prioritize the interests of the state, casinos, and Atlantic city to the detriment of Atlantic County taxpayers,” Levinson argued in a letter to Murphy. “How can these residents be so easily ignored?”

Levinson is requesting Murphy only sign a PILOT amendment that mandates Atlantic County receive its full property tax allotment under the bill’s original formulation.

‘Preposterous’ Allegations

Outgoing Democratic state Senate President Stephen Sweeney, one of the PILOT change backers, made a large claim recently. He said that without a PILOT adjustment, as many as four Atlantic City casinos could be on the verge of closing.

Though he failed to provide any specific data to back up that statement, the old adage, “As Atlantic city goes, South Jersey goes,” has prompted some state lawmakers into backing the PILOT effort.

Levinson, however, says Sweeney’s casino closure statement is a “preposterous assertion.”

This money is just going to the casinos’ pockets,” Levinson opined. “That’s what it comes down to: it’s a money grab.”

The casinos contend that their businesses are still reeling — despite record gross gaming revenue numbers — from the impacts of COVID-19. Casino Association of New Jersey President Joe Lupo argues that the casinos have “paid our fair share” in property taxes since 2016.