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For Atlantic City casino operators, two out of three ain’t bad.
The New Jersey Legislature on Thursday passed two bills designed to give them financial relief in the wake of the COVID-19 pandemic, though a third such bill was tabled.
Assembly bill A4032 gives approval for a reduction in gross gaming revenue taxes for a one-year period that began on July 2, when eight of the city’s nine casinos opened after being shut down since mid-March due to the pandemic.
Gaming credits and other perks offered by casinos offered to customers also can be deducted from the monthly gross gaming revenue figures, further reducing the tax burden in that span.
The main bill passed the Assembly by a 71-5-3 vote — an unusual result on a day on which dozens of bills were passed either unanimously or by a strictly party-line vote, with Democrats in the majority.
The five dissenters are Republicans from the northern half of the state, but there would have been more “no” votes if not for the addition of 10 amendments that will necessitate a new vote by the state Senate. One amendment was a “findings and declarations section concerning the impacts of the COVID-19 emergencies on the casino industry and the State and regional economies” that read:
“The COVID-19 pandemic and consequent business closures has 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 also has 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.”
Other amendments remove a further tax break on hotel fees; require casinos to make “a good faith effort to rehire former and new employees commensurate with an increase in business activity”; and remove a provision to have the Casino Reinvestment Development Authority (CRDA) provide marketing funds for the industry.
Another provision ensures that casino tax funds that go to assist senior citizens and disabled residents will not be reduced as a result of the tax breaks.
A second bill, which passed in the Assembly 78-0, allows both casinos and racetracks to deduct gross revenue, above a pair of thresholds, equal to the amount of sports betting credits the operators offered.
However, a third Atlantic City casino bill — A4031 — was not put up for vote.
That bill would have required the state treasury to make interest-free loans to the casinos totaling $75 million, to be repaid within three years.
The impetus was concerns that the casinos “may not have sufficient funds on hand to make the quarterly payments in lieu of property taxes to Atlantic City that are due.”
But thanks to a booming online casino and mobile sports betting operation as well as brick-and-mortar reopenings at up to 25% capacity, the industry’s August 2020 revenues were down by just 7.5% compared to the previous August. And with all of the cutbacks elsewhere on funds due to the state’s fiscal situation, that bill proved politically impractical.
Finally, a “raffle bill” also passed unanimously in the Assembly and the Senate on Thursday.
This bill allows for charitable organizations to offer raffle sales remotely in light of the pandemic, with a provision that organizers must partner with a “large sporting venue” to keep the sales in line with current laws regulating such games.