Atlantic County and the state of New Jersey have agreed to settle a 2021 lawsuit regarding amendments to Atlantic City casinos‘ payment in lieu of tax (PILOT). The county came out on top of the dispute, receiving $15 million as part of the settlement agreement.
Atlantic County Executive, Dennis Levinson, has said back in February that the area was owed more than $14 million. It certainly came out on top, getting a little more than the asking price. Levinson said in a statement:
“I am elated with this settlement and extremely grateful for the efforts of our legal counsel. It was a hard‐fought battle.”
Levinson estimated the county secured around $59 million more than it would have if it didn’t challenge the program.
Lawsuit dates back to 2021
According to the Press of Atlantic City, the settlement was made official on April 2. It’s the conclusion of a four-year battle that started in 2021, when Atlantic County first filed the lawsuit.
There had been no movement on the case since March 2024. However, because of the expiration nearing nearing on the current PILOT, talks on an extension and settlement started heating up in February.
Atlantic County sued New Jersey over amendments that would have altered a previous court-ordered settlement resulting from the original law. The amendments affected the aggregate base pay, investment alternative tax (IAT) and gross gaming revenue (GGR) tax in some way. However, the biggest change removed online casino and sports betting revenues from the GGR calculation.
State Sen. Vince Polistina, R-Atlantic, also provided a statement regarding the settlement, and the importance of coming to an agreement. He said:
“The long saga of Atlantic County litigation needed to end so that we can move forward with addressing the challenges in Atlantic City. We thank the Governor for his continued commitment to our region and look forward to working on MSRA (Municipal Stabilization and Revitalization Act), the PILOT, and return of IATs (Investment Alternative Tax funds) back to CRDA (Casino Reinvestment Development Authority) along with other initiatives for Atlantic City.
“The people of Atlantic County are better served through the collaboration, communication and negotiation we have demonstrated with the administration rather than prolonged litigation and acrimony from some.”
The current PILOT program expires at the end of 2026. Coming to a settlement agreement is certainly a good start as negotiations have already begun.
New PILOT talks started earlier this year
Polistina said in February that talks of a new PILOT have been ongoing for a couple of months, getting ahead of the 2026 deadline, which spanned 10 years. Atlantic City properties and legislators came up with a structure in 2016 that eliminated property tax payments.
The program was supposed to help Atlantic City casinos, as five facilities shut down from 2014 to 2016. Much of the structure is based off gross gaming revenue (GGR) of each property.
Polstina does not believe the next PILOT is going to include casinos paying property taxes again. He said back in February:
“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.”
Atlantic County and the state have around 20 months remaining to come up with a new program.
