An assemblyman from Atlantic county proposed an amendment to the second measure, known as the PILOT bill, and then retrieved it, stating it needs more refinement.
Atlantic City Casinos Could See a Change in PILOT Bill
On May 5, assemblyman John Armato from Atlantic County introduced changes to the casino payment-in-lieu-of-taxes bill (PILOT), aiming to help casinos recover from the pandemic, and he pulled it at an Assembly State and Local Government Committee hearing on May 12. Armato stated that it would change the bill a lot. He said that he wasn’t ready to talk about it.
PILOT is a 10-year bill, which passed in 2016, aiming to stabilize Atlantic City. All of the casinos paid collectively a total amount of $120 million in 2017. After that, they continued to pay a portion of their revenue each year. In 2018, the payments for the PILOT were $132 million, and in 2020 – $150 million.
The change would set the amount that casinos would have to pay to $125 million for 2022 and increase gradually to the gaming revenues as each of the 9 casinos would pay $5 million or $45 million in 2026.
The Amendment Proposal Received Criticism
On Monday, County Executive Dennis Levinson, a critic of the original bill, said that the changes would help gaming companies but at the taxpayers’ expense. He stated that casinos pay taxes based on the gross gaming revenues, including online casino gaming and sports wagering. Levinson said that it would benefit casinos, removing a substantial amount of money, setting a base amount, regardless of how much revenue the casinos generate. The loss in property tax relief could amount to millions.
In a written statement, Armato said that responsible legislators introduce an amendment and discuss it. After that, they take into consideration the results of the conversations. He said that he introduced the amendment to help ensure financial success and independence for the county. He said that the discussions led to more analysis and considerations for more changes, which would refine the bill.
According to Armato, the bill was established based on the casinos’ economic state when lawmakers wrote it. A lot has changed since then, and the economic environment in the middle of a pandemic has made lawmakers consider changes to sustain the financial stability in the county.
Atlantic City Casinos Struggled during the Pandemic
The new amendment aims to help Atlantic City’s 9 casinos recover financially from the pandemic. They closed from March to June last year and suffered financially due to the restrictions for months after. Their profits went down by more than 80%, and the hit could have been worse if it wasn’t for online gaming and sports wagering.
Based on the New Jersey Division of Gaming Enforcement (DGE) recent report, the Atlantic casino’s market has run strong. However, much of the gross gaming revenue (GGR) recorded last year came from online gaming.
According to publications, casinos said that they have to pay a portion of what they make from online gambling to third-party operators and expressed their doubts regarding the fairness of the PILOT bill.
New Jersey continues to ease up restrictions. Starting from May 19, casinos and other public places will operate to 100% capacity.
The state recently recorded a gaming revenue increase by 32.3% ($993.7 million) for the first 3 months of the year, as opposed to 2020.