New Casino Tax Relief Bill Being Discussed by NJ Legislature

The New Jersey State Assembly Appropriations Committee will consider passing a casino tax relief bill. One casino tax relief bill reduces taxes on gaming revenue for one year following a casino’s reopening, eliminating hotel fees through the end of the year, defers some licensing fees and finally, permanently allows for a 100% tax deduction of provisional gaming coupons and credits.

Another casino tax relief bill under consideration allows casino operators to receive a credit from the free bets and promotional wagers offered to customers.

Operators Demand a Casino Tax Relief Bill Following Shutdowns

The New Jersey Assembly Appropriations Committee will consider these two pieces of legislation, in hopes of providing tax relief to Atlantic City’s nine casinos.

One casino tax relief bill, A4032/S2400, was passed by the state Senate in June. A4032/S2400 makes both temporary and permanent changes to casino taxes and fees. Another casino tax relief bill, A4002/S2257, gives casinos a tax credit on sports betting revenue.

The nine Atlantic City casinos were forced to close on March 16 to slow the spread of the coronavirus. They were only allowed to reopen on July 4th weekend. The four-month shutdown naturally resulted in huge losses for the casinos, and they have demanded immediate tax relief.

The casino tax relief bill presented in June also allocates $100 million of COVID-19 related federal grant money to the New Jersey Economic Development Authority to help small businesses.

The casino tax relief bill was amended in the State Senate to reduce the amount of time casino operators would receive a reduction in gaming revenue taxes. The amendment also eliminated a tax break on parking fees and the cost of promoting tourism to the properties.

 While the casino tax relief bill is good for Atlantic City’s casinos, based on the recent numbers, and the proposed bills could reduce the amount of casino-related fees and taxes paid to the Casino Reinvestment Development Authority and the state of New Jersey by as much as $93 million over the coming year.

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The Casino Relief Bills Move Forward in Trenton

Assembly Majority Leader Louis Greenwald, who sponsored the bills, believes that stabilizing New Jersey’s casino industry needs to remain a priority. He said that the legislators in Trenton are closely watching Atlantic City to see how the coronavirus has impacted confidence in tourists returning to casino resorts.

“It’s really just a very fluid situation as the coronavirus continues to change and how we manage the outbreak, while supporting the casino industry. We’re trying to figure out what’s the best way to move forward,” Greenwald said. “We’re really focused on how to establish a robust and reliable consumer base that’s managing COVID-19 efficiently and safely. We’re learning more and more about this every day and that’s just kind of where it is.”

Greenwald went on to say that, “It’s not really so much about giving the casinos tax relief as it is about getting the men and women in the workforce back into the casinos. It’s also about stabilizing that portion of the industry.”

Sports Betting Tax Relief Bill

The sports betting tax relief bill was introduced back in May, but was only referred to the committee recently.

This tax relief bill allows gaming and sports betting operators to receive a tax credit from the free bets and promotional wagers offered to customers. This bill allows for a tax credit after the first $12 million made from online sports bets and after the first $8 million made from in-person sports bets.

According to the bill, any amount above those numbers won’t be taxed. That legislation applies to both Atlantic City’s retail sportsbooks and the state’s racetracks, such as Monmouth, that offer sports betting.

A third casino tax relief bill, which would allow the casinos to apply for interest-free loans to help pay for operating costs, did not make it through the legislative committees.

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