Update: The New Jersey legislature approved the recently amended A4032/S2400 in a 71-5 General Assembly vote on September 24. The measure will advance to the state Senate for consideration.
The Assembly also passed emergency relief bill A4002/S2257 during its Thursday meeting.
The next step
The New Jersey Assembly Budget Committee voted on Tuesday in support of giving temporary tax breaks to Atlantic City casinos to help them weather the COVID-19 pandemic.
Bill A4032/S2400 is now set for a full Assembly vote on Thursday; the Senate already passed the bill in June.
Total operating losses for the city’s casinos were over $112m.
Lawmakers outlined how the 107-day shutdown of casinos during the height of the pandemic led to “catastrophic and unprecedented economic contraction.” Total operating losses for the city’s casinos were over $112m. Almost half of the sector’s workforce was let go.
Specifics of the bill
The legislation would cut gross gaming revenue taxes for one year. It would also allow casinos to deduct the sum of promotional gaming credits given to customers from monthly gross gaming revenue.
A previous version of the bill included tax breaks on parking and hotel fees. It also contained a provision that would have seen the Casino Reinvestment Development Authority paying for city marketing. Both features were eventually removed.
Some lawmakers initially opposed the legislation, as the fees and taxes are used to fund state programs for disabled and elderly people. However, the amendments make sure that state programs will still receive the same level of funding they were getting pre-pandemic.
Another casino relief bill, A4002/S2257, is also set for a General Assembly vote on Thursday.
As part of this other bill, racetracks and casinos would be able to deduct all promotional betting credits from gross sports betting revenue above defined thresholds. The deductions are permitted once the operator’s online/mobile sportsbook revenue is over $12m for the given tax year and more than $8m for retail sports betting.
Atlantic City casinos were able to reopen on July 2 after having been closed since March 16 because of New Jersey Governor Phil Murphy’s shutdown order. Since reopening, they can only operate at 25% capacity and must follow extensive health and safety rules.
Eight of the city’s nine casinos reopened on the first weekend, while the Borgata waited until July 26 before welcoming back guests. The latter laid off 2,295 employees at the end of August – about 42.5% of its total workforce.
gross gaming revenue increasing by 23% from July to August
Casino revenue has been recovering gradually since reopening, with gross gaming revenue increasing by 23% from July to August. August revenue was still less than 70% of what it was for the same period in 2019.