The state has filed a motion for a stay of a judge’s Aug. 29 decision that struck down amendments to the casino payment-in-lieu-of-taxes legislation, pending appeal.
But it has not yet filed that appeal, according to court documents.
Atlantic County Superior Court Judge Michael Blee is scheduled to hear oral arguments regarding the request for a stay Oct. 7.
In his decision in a lawsuit brought by the nonprofit Liberty and Prosperity, Blee ruled that amendments to the PILOT law passed in late 2021 and signed by Gov. Phil Murphy were passed on dubious grounds and violated the state Constitution by favoring an industry over a public purpose.
The amendments to the original 2016 PILOT law granted Atlantic City’s casinos tens of millions of dollars in tax breaks by removing internet and online sports gaming from calculations of casinos’ gross gaming revenue.
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In a brief seeking the stay filed by acting state Attorney General Matt Platkin this month, the state argued Atlantic City and state finances will be thrown into disorder and the benefits of the amendments will be lost if Blee’s order is not put on hold until an appeal of his decision can be heard.
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The state also argued it would suffer irreparable harm without a stay and denied that the amendments violated the state Constitution, saying they serve the public purpose of further stabilizing the Atlantic City casino industry.
In his response brief, Liberty and Prosperity President Seth Grossman said the state has produced “no credible fact or expert opinion evidence that laws reducing taxes for a specific industry, such as casino properties, and raising taxes on other properties ... increases the overall economic health of Atlantic City and Atlantic County.”
Grossman also said the state produced no evidence that the casino industry suffered more during the COVID-19 pandemic than other industries, and pointed out that the state Constitution specifically prohibits the Legislature from taxing one group of real estate differently than others in the same jurisdiction.
Chief of Investigations for the Division of Gaming Enforcement Christopher Glaum certified for the state that, “If this Court’s invalidation of the Amendment goes into effect, then the former statute will be in effect, and reinvestment into the casino hotel properties may decline as it did during the 2009–2017 period. This would have substantial economic and societal impacts not just to Atlantic City, but to the State as a whole.”
Glaum also said Resorts, Golden Nugget and Bally’s would face much higher payments under the original PILOT, potentially threatening their survival. He also discussed the potential increase in competition Atlantic City will face from new downstate New York casinos, which are expected to debut in the next several years, but were not part of the discussion in the Legislature on the need for the amendments.
Grossman, however, said if casinos are found to serve a public purpose simply by employing people and paying taxes, then all businesses do so.
“However, the Uniformity Clause was added to our state Constitution in 1875 and kept in our constitution in 1948 to specifically prevent the Legislature from giving preferences to particular property owners for any reason,” Grossman wrote.
REPORTER: Michelle Brunetti Post