NJ Governor Phil Murphy Signs Bill That May Prevent Closure of 4 Atlantic City Casinos

New Jersey Governor Phil Murphy signed a bill Tuesday that will give tax breaks to the state's Atlantic City casinos, possibly saving four from closing due to the impacts of the COVID-19 pandemic. The so-called PILOT bill is meant to help ease those impacts on casinos by reducing large payments that will be made instead of property taxes to Atlantic City, Atlantic County and the school system.

The legislation, which New Jersey's legislature passed shortly before midnight on Monday, will make changes to an existing law that allows Atlantic City casinos to make the payments. The casinos will still see their payment amounts increased, but the size of the increase will be smaller.

Murphy said Monday that the bill's provisions and approach "are all good by me."

Steve Sweeney, the state Senate's outgoing Democratic president, said that up to four of the city's nine casinos could have been in danger of closing if the bill didn't become law.

No casinos have publicly said that they needed the legislation to stay open, and Sweeney provided little evidence to back up his claim.

Atlantic City Casinos
A bill granting tax relief to Atlantic City's nine casinos is in the hands of New Jersey Governor Phil Murphy on December 21 following its passage by the state Legislature. Above, gamblers place a bet on a roulette table at Bally's Casino in Atlantic City, New Jersey, on June 23, 2021. Wayne Parry/AP Photo

The Casino Association of New Jersey said in a statement Tuesday that the measure "will protect thousands of jobs and provide certainty and stability to the market."

"We look forward to Governor Murphy quickly signing this important legislation into law, and we are committed to working to continue to revitalize our historic seaside destination resort," said the organization, which is the Atlantic City casinos' trade group.

The casinos collectively expect to pay about $10 million to $15 million more next year after the bill is enacted. Without it, they say, their payments were due to rise by 50%.

Revenue figures reported by the state show the casinos' overall numbers continuing to rise this year. But the casinos say those figures paint a distorted picture of their true financial condition by including money from internet gambling and sports betting with the money won from in-person gamblers.

Online and sports betting money must be shared with third-party providers like technology platforms and sports books.

That is one big reason the bill excludes those two revenue streams—the fastest growing in Atlantic City's casino industry—from calculations on how much the casinos must pay in lieu of taxes.

The casinos say their core business—winning money from in-person gamblers—is down significantly from 2019, the year before the pandemic hit.

While the two newest casinos, Hard Rock and Ocean, have seen their in-person revenue increase since 2019, the seven other casinos are down a collective 22% since then, according to the Casino Association of New Jersey.

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 law prevented them from appealing in return for the certainty of knowing what their financial responsibilities would be for years to come.

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

The Associated Press contributed to this report.

Bill Head to Murphy's Desk
New Jersey Governor Phil Murphy is expected to sign a bill that will give tax breaks to Atlantic City casinos, possibly saving four from closing due to the impacts of the COVID-19 pandemic. Above, Murphy delivers a victory speech to supporters at Grand Arcade at the Pavilion on November 3 in Asbury Park, New Jersey. Eduardo Munoz Alvarez/Getty Images