Much-needed help
The New Jersey Senate gave its approval to a casino relief bill aiming to help Atlantic City resorts which have struggled during the coronavirus lockdown. It would implement a reduction in gross gaming revenue taxes and get rid of certain types of fees.
temporary changes to the casino win tax structure
Senate Bill 2400, introduced by Senate President Stephen Sweeney (D-Salem), passed Monday night by a 28-4 vote. The legislation calls for temporary changes to the casino win tax structure as well as the suspension of some resort and gaming fees.
The next step for this bill is consideration in the Assembly, with a vote expected by the end of the week.
Specifics of the bill
The bill would give casinos a 12-month tax relief period starting the day they reopen. The normal 8% gross gaming revenue tax rate would drop significantly depending on a casino’s monthly win compared to the same month immediately before March 1, 2020.
Promotional and gaming credits would be fully deductible against a casino’s gross gaming revenue, further reducing the tax liability. License fees would be deferrable for up to six months following reopening.
The bill waives the yearly $500 license fee for every slot machine from July 1, 2020 to June 30, 2021. Casinos would also have access to interest-free loans if needed.
The text of the bill dated June 12 states that the daily fees on parking spaces would be waived for two years, but according to the Press of Atlantic City, an amendment on June 15 removed that concession. The amendment also reduced the gaming revenue tax relief period from 24 to 12 months.
Not everyone is on board
In addition to the four senators who voted against the bill, eight more abstained.
Former New Jersey Governor and current Senator Richard Codey (D-Essex) was one of those who skipped the vote. Codey provided his reasoning for doing so, saying: “The state is as poor as it gets right now. We’re going to give them [casinos] these tax breaks while all our employers throughout the state are suffering and closing their doors.”
casinos in Atlantic City are a core piece of the state’s economy and should receive some financial help
Supporters of the bill say that the casinos in Atlantic City are a core piece of the state’s economy and should receive some financial help. Senate President Sweeney said that his goal is to just get the casino sector up and running once more.
Senator Michael Testa (R-Cape May) said that casino businesses have been subject to many special taxes for 30 years. Therefore, the tax relief simply temporarily removes some of these contributions.?
Casinos still not reopened
The forced closures of Atlantic City casinos during the coronavirus pandemic has left more than 20,000 people in the industry out of work.
Naturally, the casinos themselves are under significant financial strain. Gaming revenue dropped 69% in April, buoyed only by online gambling operations.
While most states across the country have been reopening casinos in recent weeks, Atlantic City properties remain shut. According to New Jersey Governor Phil Murphy, the casinos are part of the final stage of the government’s reopening plan. Murphy previously said that he hoped the casinos would be back in action by the Fourth of July holiday weekend.
There have been over 170,000 confirmed cases of COVID-19 in New Jersey as of Tuesday and nearly 13,000 confirmed deaths.