Casino Reinvestment Development Authority to Benefit from Sports Betting

Atlantic City

After losing the casino investment alternative tax in 2016, the Casino Reinvestment Development Authority (CRDA) will now receive funds from the New Jersey sports betting industry after Governor Phil Murphy signed legislation dedicating a portion of revenues to the organization.

The legislation approved by Governor Murphy will provide 1.25% of sports betting revenues to the CRDA. The tax percentage is on top of the 8.5% tax set for revenues from land-based facilities and 13% tax established for sports betting operations that take place online as well as via mobile.

New source of funding

In 2016, lawmakers decided to redirect the casino investment alternative tax to focus on the debt of Atlantic City. This caused a major cut in funding for the CRDA. The group has since been reliant on room and parking fees as well as luxury taxes to function.

With the introduction of sports betting in New Jersey, it seems that lawmakers have found a new source of funding for the group. Since mid-June when casinos and racetracks in the state began offering sports betting, the new market has created more than $16m in revenues.

As revenues only continue to rise, the small percentage set aside for the CRDA could translate into big bucks for the organization.

Director of communications and marketing for CRDA, Larry Sieg, said: “After a three-year hiatus, we are looking forward to filling the void with much-needed promotion of Atlantic City as a world-class vacation destination. Our team looks forward to having the opportunity to once again get the DOAC brand into the consumer market to increase visitation and economic impact.”

History of CRDA

The CRDA was created in 1984, and has responsibility to direct the spending of casino reinvestment funds in public and private sectors to benefit Atlantic City as well as other areas of New Jersey.

In the past, the group has been accused of mismanaging funds. A recent audit of the state agency was released in September that revealed several instances where money was mismanaged, and operational deficiencies occurred.

Mayor of Atlantic City, Frank Gilliam, does not seem excited about the CRDA being given the revenues generated from businesses located in the gambling city.

Gilliam stated that he would never be happy with Atlantic City revenues being sent to a state agency when the money could have been used to help the city. The mayor pointed out that history has shown that marketing money has not been spent wisely by the organization.

When the audit of the CRDA was released, Gilliam had strong words on how the authority had been neglectful in how it spent money.

The performance audit was 29 pages long and released by the Office of the State Auditor, detailing several instances of fund mismanagement. The audit covered a time frame from the beginning of January 2014 until the end of December 2017.