North Jersey Casinos Could Be Taxed 40 to 60 Percent, State Lawmaker Says
Posted on: March 8, 2016, 01:20h.
Last updated on: March 8, 2016, 01:49h.
Two North Jersey casino licenses could soon be issued, but the gambling operators in receipt that are ready to tap into the region’s nearly 3.5 million residents and New York City’s 8.5 million inhabitants across the Hudson might faint when they also receive their tax bill.
During a special public hearing on Monday, State Assemblyman Ralph Caputo (D-District 28) responded to the question of potential tax rates that casinos in the northern counties might face by revealing, “As a guess, it would be 40 to 60 percent,” he said.
That’s a far cry from the 9.25 percent rate casinos now pay in Atlantic City.
New Jersey lawmakers are considering an amendment to the state’s constitution that would allow two gambling facilities to be built in North Jersey. Should it pass, it would end the longstanding gambling monopoly held by Atlantic City since 1976.
Competition from neighboring states has created an economic disaster in the former gambling mecca of the East Coast, and lawmakers in Trenton are scrambling to find new ways to recoup the dissipating tax revenue.
Icahn Can’t Believe It
The topic of gambling expansion will always have its opponents, but in the Garden State, there’s a rather powerful mole. As Casino.org reported last week, billionaire Carl Icahn delivered a $100 million ultimatum by saying he wouldn’t invest those funds in his Atlantic City Trump Taj Mahal resort should North Jersey casinos be authorized.
Yesterday, many of the 17 backers of the state constitutional amendment responded.
“This is a game-changing proposal. We would modernize our gaming industry and provide significant relief for senior citizens and disabled residents,” Caputo declared.
“For a state sorely in need of new revenues for vital needs such as programs and property tax relief for senior citizens and disabled residents, this is a win-win,” Assemblyman Gary Schaer (D-District 36) said. “This proposal would help bring a brighter economic future for our state.”
After being approved by the state’s Assembly Judiciary Committee, the resolution now moves to the floor in the state capital, where it will need three-fifths approval in the Assembly and Senate. Should the chambers pass the motion to alter the state constitution, voters would have the final say and would require a majority approval.
Taxing North Jersey casinos at levels as sky high as 60 percent on net winnings might thin the bidding field considerably. However, a scan around nearby gambling locales shows such exuberant rates aren’t exactly out of the ordinary for neighboring states, at least.
Connecticut, for example, is a fairly contained 18 percent, and Delaware a bit higher at 29.4 percent for table games, at least. But then New York takes the cake with a 60 to 69 percent take on earnings, and Pennsylvania isn’t much better with a 55 percent rate.
Nevada, not surprisingly, wins hands down with a modest 6.75 percent tax rate, although the sheer number of casinos in the Silver State obviously make that number more bodacious than it might appear.
Too Much of a Good Thing
While 40-60 percent seems to fall adequately in line, especially considering the market in question, New Jersey State Senate President Stephen Sweeney (D-District 3) said he finds the rate excessive.
Atlantic City Assemblyman Chris Brown (R-District 2) also questioned how introducing new casinos to an already oversaturated market would help the constituents he represents.
“Is it going to pave the roads so that people who are unemployed can get out of town?” Brown asked.
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