Atlantic City Casinos’ PILOT Program Set to Expire as Lawmakers Mull an Extension

Written By Corey Sharp on February 4, 2025
new jersey boardwalk with casinos featured

The 10-year mark for the Atlantic City casinospayment in lieu of tax (PILOT) is set to expire next year, and there’s talk of lawmakers extending the agreement.

Atlantic City properties and legislators came up with structure in 2016 that eliminated property tax payments because of the closures of five casinos from 2014 to 2016. Much of the PILOT payment is based on the gross gaming revenue (GGR) of each property.

There have been amendments made over the years. But now that the deadline is quickly approaching, the industry is getting out in front of it before it’s too late.

PILOT extension discussions have already started

It’s hard to believe that the 2016 PILOT agreement amongst lawmakers and Atlantic City casinos is already set to expire next year. That’s why talks have been ongoing for the last couple of months, according to State Sen. Vince Polistina, R-Atlantic.

Atlantic County Executive, Dennis Levinson, has not yet heard from Polistina about a new deal. However, Polistina said it’s coming. He told The Press of Atlantic City:

“As we move forward we will discuss what we are going to propose with City Council and county commissioners and build consensus this time before we get it passed.”

The intent of the PILOT structure was triggered by five casinos closing prior to 2016. It was to alleviate casinos from paying hefty property taxes to preserve the market.

Polistina does not see casinos going backwards and paying property taxes again. He continued:

“I don’t see ever going back to traditional real estate taxes for casinos. You need the PILOT to give certainty. That has to continue in perpetuity.”

New Jersey essentially has close to two years – 23 months – to get a deal done.

PILOT program was amended it 2021

The early stages of discussions for a new agreement has not brought up any big splashes for the next PILOT structure. However, lawmakers did amend the current program about halfway into the term.

The COVID-19 pandemic threw a wrench into the PILOT, which especially caused online casinos and online sports betting to skyrocket.

Smaller properties such as Resorts Atlantic City and Golden Nugget saw payments increase over the years because of the rapid increase in online gambling. The PILOT was based off the following structure:

  • Aggregate base payment
  • Investment alternative tax (IAT): Set tax rate on retail (1.5%) and online (2.5%) gambling revenues
  • Variable payment directly tied to GGR

The amendments affected all three variables in some way. However, the biggest change is 2021 removed online casino and sports betting revenues from the GGR calculation. That helps a property such as Golden Nugget, who has a stronger online presence than retail.

Atlantic County previously took legal action against PILOT

Levinson is not in favor of the PILOT program and believes the county is getting underpaid. The Press of Atlantic City reported that received 13.5% of the payment through 2024, followed by a drop to 12% in 2026 and 2026, the final two years.

Because of that, Levinson filed a lawsuit against the Atlantic City PILOT, which has not moved since March 2024. Levinson believes that program is tying up money that could otherwise be used so taxpayers aren’t on the hook for it.

Under the existing PILOT, the county is owed more than $14 million. Levinson told The Press of Atlantic City:

“Before they start a new PILOT, it would be nice if they paid their debts.”

The lawsuit has appeared to stall in the court system, as it looks like a new PILOT agreement is coming for Atlantic City casinos.

Photo by Sean Pavone/Shutterstock
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Written by
Corey Sharp

Corey Sharp serves as the lead writer for PlayNJ after joining Catena Media in 2022. Born and raised in Philadelphia, he previously worked for the Philadelphia Inquirer and NBC Sports Philadelphia as a sports writer and content producer. As lead writer for PlayNJ, Corey heads up a talented team of expert journalists and analysts to bring you the most comprehensive coverage of gambling news in New Jersey.

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