The New Jersey Senate passed multiple gambling-related items Thursday in the hope of benefitting a beleaguered Atlantic City casino industry.
Contrary to recent headlines, Atlantic City casinos are struggling as a result of a 14-month period unlike anything ever experienced in 43 years of legalized gambling. A forced shutdown and stifling reopening restrictions stunted an industry that had only recently started to recover from a one-two economic punch a decade ago.
While Thursday’s actions will not cure all that ails Atlantic City casinos, each can aid the industry.
Read a breakdown of each piece of legislation below.
COVID ‘reversed’ growth of Atlantic City casino industry
The coronavirus pandemic decimated the brick-and-mortar gambling industry in Atlantic City in 2020. A 107-day closure resulted in annual profit declines of more than 80% and over 15,000 lost jobs.
Fearing a ripple effect on the South Jersey economy, Trenton passed a series of permanent and temporary financial breaks to expedite recovery.
This is how one of the approved casino relief bills described the situation:
“The COVID-19 pandemic and consequent business closures have clearly not just reversed the consistent track of economic improvement that the Atlantic City casino industry had worked very hard to achieve over the last several years, but has also set back the economy of an entire region that is greatly dependent on the jobs, tourism spending and purchases that the Atlantic City casinos generate.”
Additionally, voters will be asked whether the current sports betting law should be amended to allow legal bets on NJ college teams and collegiate events hosted in the Garden State.
Another bill that would drastically alter Atlantic City casino’s annual property tax payments was not part of Thursday’s voting session. That bill seeks to amend an already controversial law and is facing backlash from local officials.
Atlantic City casino industry getting COVID tax breaks
The most meaningful bill — at least to the bean-counters in AC casinos — is S2400/A4032. This bill provides temporary breaks on taxes and fees as well as permanently redefines eligible gaming credit deductions from gross gambling revenue.
Despite limited opposition, the bill has been amended multiple times. This bill is a watered-down version compared to how this proposal looked when it was introduced in 2020.
The Assembly passed it in September but must now approve the Senate’s amended proposal.
If signed into law, casinos will get a two-year tax exemption on all promotional gaming credits (PGCs) issued to customers. Also, what qualifies as a PGC will expand to include table game and match play coupons.
The bill also temporarily reduces tax liability on casino gross revenue tax for brick-and-mortar properties.
The Office of Legislative Services said the bill would temporarily reduce state revenue, but could not determine a fiscal estimate.
More tax breaks for casinos, racetracks
Another “insider baseball” type bill approved Thursday is A4002/S2257. This bill allows a deduction of promotional gaming credit from gross revenues on sports wagering.
Any amount above $12 million of PGCs for internet sports bets and $8 million of PGCs on retail wagers can be deducted from the gross revenues and not taxed.
The OLS concludes this bill will reduce revenue statutorily earmarked for the Casino Revenue Fund and the state’s General Fund. However, the OLS does not have data related to the current application of sports betting PGCs. Therefore, the OLS could not generate an estimate.
Gov. Phil Murphy will have to sign the bill before it can become law.
Wanna bet on Rutgers, Seton Hall, or the NCAA Tournament in 2025?
A third action taken by the Senate Thursday still has a few more steps before being final.
The Senate approved a concurrent resolution in support of amending the state’s sports betting law to allow legal wagers on NJ college teams and collegiate events taking place in the Garden State. As it stands now, NJ sportsbooks cannot accept bets on a Rutgers football game or Seton Hall basketball game, for example. Nor can any books take action on any collegiate tournament hosted by a venue in the state, such as the MAAC basketball tournament in Atlantic City.
The Assembly still needs to approve the resolution. If that happens, the matter then goes to voters who have to approve it to amend the sports betting law.
This action could change an overzealous prohibition in the original law. Concerns about gambling’s potentially negative influence on collegiate athletics never materialized, a fact lawmakers have publicly acknowledged.
The OLS expects the resolution to “marginally increase” state revenue.