Editorial

Hardrock Online Casino NJ Among Proposed Financial Relief Participants

The coronavirus pandemic impacted many industries worldwide, including the gaming industry. New Jersey lawmakers are currently discussing financial relief plans for many of Atlantic City’s casinos to help the industry recover. Current plans are to alter the calculations on contributions the casinos owe to Atlantic City to aid the industry’s revival.

The latest bill seeks to renew the measure requiring casinos to make payments in lieu of taxes which was imposed on all gambling establishments five years prior. Known as PILOT, this measure was originally put in place to help revive the casino industry which was struggling. At the time, five of Atlantic City’s twelve casinos has permanently shut their doors. PILOT helped the remaining casinos have certainty and greater control over their finances by making payments to the local government in place of avoiding property tax through appeals.

According to Joe Tyrell, regional vice predicant of Caesars Entertainment, the payment in lieu of taxes bill saved Atlantic City years ago. “Without the PILOT, you would not have had Hard Rock open, you would not have had Revel reopen as Ocean. The casinos were appealing their taxes.” This was blowing huge holes in the city’s budgets, but the payment in lieu of taxes bill helped the local government and got the casinos back on their feet.

There are nine land-based casinos in Atlantic City at present. The latest version of the financial relief bill will extend the PILOT bill and alter the calculations used to determine payments owed to local governments. The new legislation seeks to remove sports betting and internet gaming from the calculations. If the bill is passed, payments for some gambling establishments increase, whereas for others their monetary contributions will decrease.

Among those with increasing payments as part of the financial relief plan is the Hard Rock Casino, a venue on the brink of closure in 2014. The property only opened its doors in 2018 thanks to the original PILOT bill. You can find Hardrock Online Casino New Jersey information here. The new legislation sponsored by Senate President Steve Sweeny will see the casino’s PILOT payments nearly double from $7.7 million in 2021 to $15.9 million in 2025.

Other properties seeing a rise in fees include Bally’s Casino ($5.3 million to $7.7 million), the Golden Nugget Casino ($4.8 million to $6.2 million), Ocean Casino ($7.5 million to $11 million), Resorts Casino ($3.5 million to $8 million), and the Tropicana Casino ($8.3 million to $11 million).

Comparatively, the new bill gives Atlantic City’s biggest players discounts on their usual PILOT payments. The industry-leading Borgata Casino will have its payments reduced from $29 million this year to $22.8 million in 2025. Other gaming companies with decreasing government contributions are Caesars whose payments would drop from $17.5 million to $9.3 million, and Harrah’s who would see a decrease from $25.6 million to $17.8 million.

Overall, the new bill reduces the total amount of payments due to $110 million next year, $10 million lower than last year’s PILOT contributions. This should help resurrect the in-person gaming industry of which revenue is still down by 7.5% compared to pre-pandemic levels, according to the president of the Casino Association of New Jersey Joe Lupo.

While the latest legislation will change PILOT contributions, the proposed bill does not affect the other taxes Atlantic City gambling companies owe. All operators’ internet gambling revenue will continue to be taxed at 15%, sports betting revenue at 13%, and in-person gaming revenue at 9.25%, as per Atlantic City’s tax rates which can be found here.

The bill was advanced through the state Senate committee earlier this month but still needs to be considered by the full Senate and the Assembly. The overall outlook is positive, though the chairman of the Senate’s Community and Urban Affairs Committee has expressed concerns over the removal of internet casino gambling and sports betting from the calculations. Within the first nine months of 2021, revenue from online gambling increased by 44% year on year to bring in almost $1 billion. Sports betting also increased by 150% over the same time period, of which 80% comes from online wagering.

Nevertheless, operators argue that the revenue from online gaming is already being shared between multiple third parties, including tech providers. They argue that bearing the full weight of taxes puts them in a financially unstable position, thus the latest financial relief proposal can help stabilize the industry until casino revenue increases to pre-pandemic levels and things are more certain.

Related Articles

Back to top button