In 2021, the New Jersey Legislature provided Atlantic City’s nine resorts with a major advantage when they reduced the annual property tax that the casinos must pay. The state government, led by Governor Phil Murphy, have ensured that the casinos will pay their fair share of taxes, regardless of the outcome of a legal challenge that is currently underway.
The Payment-in-Lieu-of-Tax (PILOT) agreement, which has been in effect since 2016, requires the casinos to pay taxes based on their annual Gross Gaming Revenue (GGR). The reduction in PILOT payments was due to the state deciding to exclude iGaming and online sports betting revenue from the calculation. As a result, the nine casinos in Atlantic City saved an estimated $55 million in taxes last year.
Liberty & Prosperity 1776, a conservative non-profit organisation, has contested the constitutionality of the PILOT amendment. This led to a stay of the PILOT calculation adjustment, which is still being appealed by the state attorneys. Nevertheless, Governor Murphy recently affirmed that the casinos will pay their full, legal tax bills.
Murphy also highlighted the positive trajectory of Atlantic City’s economy despite the competition from other cities in the region and the COVID-19 pandemic. He believes that the town is now appropriately sized with nine casinos, as opposed to its pre-2008 state where there were too many. The most recent additions to the city’s casinos were Hard Rock and Ocean (formerly Trump Taj Mahal and Revel) which opened in 2018.