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Senate committee to discuss casino pilot bill Monday
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Senate committee to discuss casino pilot bill Monday

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Casinos have best quarter ever; 2020 total exceeded already

People play roulette at Bally's Atlantic City in June. Figures from the American Gaming Association show casinos are on pace to break the annual record of $43.65 billion, set in 2019.

A bill to remove sports and internet gaming figures from casino payment in lieu of taxes calculations and to cut the 2022 PILOT payment to $110 million will be discussed in a Senate committee Monday.

Sponsored by state Senate President Steve Sweeney, it is the Senate version (S4007) of a bill sponsored by Assemblyman John Armato, D-Atlantic, introduced in May to great concern from Atlantic County officials who said it would hurt taxpayers.

“We will obviously end up back in court,” County Executive Dennis Levinson said in response to Sweeney’s bill moving in the Senate Community and Urban Affairs Committee. “I’m going to fight for the taxpayer.”

PILOT payments are shared with Atlantic County and the local school district.

According to the bill text, the changes are intended to prevent financial difficulties for casinos as they rebound from the effects of the COVID-19 pandemic.

“Once again, the casino industry interests are being placed before those of the hard-working middle class families and retirees of Atlantic County,” said state Sen. Vince Polistina, R-Atlantic. “A last-minute push to try and sneak this bill in is exactly what was attempted in May and is a prime example of the type of legislators the voters rejected on Nov. 2.”

Sweeney was voted out of office after 18 years but has weeks of a lame duck legislative session to push through bills he favors. His office declined to comment.

Atlantic City Mayor Marty Small Sr. said he was still researching the bill and not yet ready to comment.

Casinos had a rough 2020, having closed for more than three months and then operated under restrictions for several more months.

But this year, they have rebounded significantly.

The original 10-year PILOT required casinos to collectively pay $120 million in the law’s first year in 2017, with payments in subsequent years determined by total gaming revenue that included brick and mortar, internet and sports gaming. The PILOT payments increased to about $132 million in 2018 and $150 million in 2020, then fell somewhat in 2021 due to the pandemic, although sports and internet gaming softened the fall.

The PILOT legislation was passed in 2016 as a way to stabilize finances in Atlantic City, which had been ravaged by successful casino property tax appeals that resulted in the city paying tens of millions of dollars in refunds.

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The county sued the state in 2017 to get its promised 13.5% of the PILOT payments and settled for roughly that percentage in most years.

“We didn’t want it (the PILOT) in the first place. We fought and sued them, and they made a settlement with us,” said Levinson, who would have preferred the city hire an assessor capable of accurately assessing casinos, as every other gaming resort does.

“Let the governor explain why, when he signed a settlement, did he do it with his fingers crossed,” Levinson said. “They made a deal, and they ought to stick to their agreements.”

County Counsel Jim Ferguson said the legal settlement with the state was based on “an understanding that the amounts listed in the bill were going to stay at those levels or increase as called for in the original legislation.”

Armato’s bill (A5587) is somewhat different than Sweeney’s. It sets the 2022 amount casinos would pay at $125 million.

Increases in payments would be tied to brick-and-mortar gaming revenues and require the casinos to each pay $5 million — a combined $45 million a year through 2026 — to Atlantic City, which is under a state takeover.

A clause in the original PILOT bill stated it couldn’t be revisited for seven years, Levinson said, questioning how that can be ignored.

The casinos closed from March to June 2020 and were restricted in their operations for months longer. In spite of that, sports and internet gaming grew, so gaming revenues under the PILOT didn’t fall as far as anticipated.

Casinos have said they must pay third-party operators part of what they make from internet and sports gaming and have questioned the fairness of including those in the PILOT calculations, according to industry publications.

Armato’s bill would also cap the amount casinos could collectively pay in a PILOT at $135 million, down from $150 million in the original bill, Levinson has said.

““The loss in property tax relief could be millions of dollars,” Levinson has said.

This year has seen a rebound for casinos.

According to data from the New Jersey Division of Gaming Enforcement, total gaming revenues after the second quarter this year were up by 33% compared to this point in 2019, with all gaming revenue included.

In-person casino revenue, however, was down about 12% compared to 2019.

Contact: Michelle Brunetti Post

609-272-7219

mpost@pressofac.com

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Staff Writer

In my first job after college got paid to read the New York Times and summarize articles for an early online data base. First reporting job was with The Daily Record in Parsippany. I have also worked in nonprofits, and have been with The Press since 1990.

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