Atlantic City’s Golden Nugget casino threatened to derail a casino tax relief plan, but then backed off those threats after changes were made to the bill to meet its concerns. The bill, introduced by State Senate President Steve Sweeney (D-3rd District), is designed to help stabilize revenue for Atlantic City while also providing cost certainty for the remaining casinos there.
Last week, Golden Nugget general counsel Steven Scheinthal had harsh words for the proposed legislation, saying that the company was prepared to “blow the whole thing up.” According to him, the bill was essentially taking money away from the casinos that could least afford it, while giving great deals to the biggest casinos in the city.
Tax Increase for Golden Nugget
In particular, Scheinthal calculated that the Golden Nugget’s tax bill would rise from $4.7 million to $8.1 million under the proposed legislation. Resorts Casino Hotel and Bally’s would also see increases in their tax bills.
Meanwhile, some of the city’s most profitable resorts would actually save money as a result of the law. Harrah’s and Caesars Atlantic City would both save more than $10 million a year, while the Trump Taj Mahal (which has nonetheless been teetering on its last legs), the Tropicana and the Borgata would reportedly save millions as well.
“We expect fair legislation,” Scheinthal said. “We don’t expect our legislators to harm us, and that’s exactly what’s going on.”
That and other aspects of the bill led Scheinthal to say that Nugget owner Tilman Fertitta might attempt to receive a court order to block the legislation from going into effect were it ever signed by Governor Chris Christie. But on Monday, the Golden Nugget seemed much more satisfied with the direction the law is now taking.
Casinos Now Protected
Following changes to the bill, a casino will now have some protection against paying more under the payments in lieu of taxes than it would have under the old tax plan. For the next five years, any excess payments will be credited towards a casino’s reinvestment tax obligation. The Golden Nugget will also save $2 million a year, thanks to the elimination of the Atlantic City Alliance marketing group, which it helped to fund.
“We’re OK with it now,” Scheinthal said on Monday. “We’re protected for five years; that’s a good thing. At least we have some stability and know our taxes aren’t going to rise.”
If the Golden Nugget’s calculations are correct, many of the largest Atlantic City casinos will still receive large tax breaks in the coming years, though they now won’t come at the expense of smaller resorts.
Sweeney’s legislation, which has already passed through committees in the State Senate and State Assembly, would ensure fixed payments from the casinos to Atlantic City over the next 15 years. The casinos would collectively pay $150 million per year for the next two years, a number that would drop to $130 million over the next 13 years. That number could be adjusted if gambling revenues changed dramatically.
That measure would be joined by others designed to stabilize Atlantic City’s budget, while also protecting workers. Money that is currently designated for the Casino Reinvestment Development Authority would instead be used to pay down the city’s debt, while minimum benefits levels would be guaranteed for all casino workers.