4 Atlantic City Casinos Could Close If Lawmakers Don't Approve Tax Breaks: Official

New Jersey's outgoing state Senate President Steve Sweeney said that four of Atlantic City's nine casinos could close if legislators do not pass a bill providing them with property tax breaks.

Sweeney, a Democrat, spoke at the state Senate's budget committee hearing Monday.

"There are four casinos in jeopardy of closing," Sweeney said. "We do not want that to happen. I don't want to have a situation where it's, 'I told you that place was going to close, and it closed.'"

The Associated Press reported that the bill would modify an existing law to allow casinos to make payments to Atlantic City, Atlantic County and the school system instead of property taxes.

Sweeney said he spoke with officials from the Casino Association of New Jersey and "they painted a very clear picture" of the financial trouble they could be in if the bill is not passed. He argued that the bill would help the casinos recover from COVID-19 pandemic losses.

The bill would also exclude internet gambling and sports betting from calculations on how much the casinos should pay. In the past, casinos have complained about having to share revenues from these with partners such as technology platforms while paying taxes on the full amount.

The bill should be in front of the full Senate later this month.

For more reporting from the Associated Press, see below.

Joe Lupo, president of the casino association and also president of Atlantic City's Hard Rock casino, said the association has been in contact with elected officials.

"We fully expect to pay our fair share, but we need stability moving forward," Lupo said, adding that the proposed changes would provide that.

Without such a bill, Atlantic City's casinos could be in "grave danger," he warned.

Atlantic City's casino profits and revenue are up significantly this year, rebounding strongly from declines caused last year by the pandemic.

The legislation was advanced through a Senate committee Monday, and now heads to the full Senate later this month. It also must be approved in the state Assembly.

It would reduce payments for some casinos, including the Borgata, while imposing higher payments onto others, including Hard Rock.

The first version of the bill was passed five years ago when Atlantic City was reeling from the closure of five of its 12 casinos.

Easily able back then to show that their businesses were worth less in a declining market, the casinos successfully appealed their property tax assessments year after year, helping to blow huge holes in Atlantic City's budget.

The new version would reduce the overall amount of payments to $110 million next year, down by about $55 million, although that would be partially offset by other payments.

The bill does not affect the state taxes casinos must pay on internet gambling revenue (15%) and online sports betting revenue (13%), nor the 9.25% tax on in-person casino revenue.

Don Guardian, a former Atlantic City mayor who will be sworn into office next month as a Republican Assemblyman, opposes the changes, saying they will benefit the casinos at the expense of taxpayers.

"With casinos paying less, everyone else will pay more," he said.