New Jersey Files Motion to Stop Cancelation of Casinos Tax Break

New Jersey attorney general has filed a request that a decision on discarding tax breaks for the casino industry in Atlantic City would be put on hold. The decision was made by Judge Michael Blee following a lawsuit filed by the non-profit organization Liberty and Prosperity 1776.

Oral Hearing on the Request for a Stay is Scheduled for October 7

The Press of Atlantic City reported that the state of New Jersey’s attorney general Matt Platkin has sought a stay of the decision made by Judge Michael Blee on August 29 to cancel a major tax break for Atlantic City casinos.

A hearing has been scheduled for October 7, when oral arguments for and against the request for a stay will be presented before judge Blee.   

According to Platkin’s motion, there will be a major disruption of the state’s financial situation and Atlantic City as a whole if the decision is not put on hold until it can be appealed by the state.

As a representative of the state, Platkin also argued that the stabilization of the casino industry in Atlantic City that was achieved through the introduced tax reliefs will be compromised. He further highlighted that the tax break amendment serves a public purpose and, therefore, is not in violation of the state’s Constitution.

In his response to the motion, Liberty and Prosperity President Seth Grossman emphasized that the state has failed to present any financial data proving that tax breaks on the casino industry are in any shape or form affecting the economic situation of Atlantic City positively.

Grossman also added that no data has been presented showing that the casino industry suffered more as a result of the pandemic than other industries in Atlantic City and New Jersey.

Grossman also pointed to the stipulation in the state’s founding document that says the state is prohibited from imposing different taxation on different kinds of real estate, which are located in the same area of authority.

The PILOT Amendment Introduced in 2021

The amendment of the PILOT system for taxing real estate was introduced in 2021 and signed by Governor Phil Murphy in a relatively quick legislative procedure.

Previously the PILOT program meant that all casinos in Atlantic City had to pay a certain percentage of their overall profits for the former financial year instead of paying property tax.

However, following complaints by the industry that the casinos are struggling as a result of the pandemic, the amendment was passed by Governor Murphy. It excluded revenue from online gambling from the equation, practically introducing a major tax break for the casinos. Consequently, $55 million less went into the state coffers.

NGO Liberty and Prosperity 1776 quickly reacted to this unjustified tax break and filed a lawsuit trying to overthrow the amendment. Judge Michael Blee who heard the case made a decision in favor of the NGO on August 29 this year.