Summary
- No financial analysis has been made public regarding the bill.
- The legislation seeks to remove sports and online gaming from revenues that determine the PILOT level for payment.
- The goal of the amendment is to help provided continued stability to the gaming industry.
Bills to amend the casino payment by Atlantic City operators who saw growth in Q3 instead of taxes is set to move forward this week thanks to a Senate budget committee. While the bill is moving forward, the usual financial analysis for such a measure has not been made public. Officials said last week that they are relying on an analysis by the state Treasury Department and the Department of Community Affairs to decide if the amendment will be of benefit to Atlantic City.
At the same time, a spokesperson for the Treasury, says an analysis has not been completed. Apparently, an analysis was provided verbally to officials of the city instead of in writing. This was not a smart move, according to Dennis Levinson, an Atlantic County Executive. He says it is difficult to believe that such a complex bill would have a verbal analysis instead of a written document. Levinson feels this might be a red flag. It may be that without the physical analysis, the bill may not move forward as intended.
Details of the PILOT Measure
The amendment bill would remove sports and online gaming revenues from totals that determine the basic PILOT level and set the amount at $110 million for next year. Back in 2019, the basic amount was set at around $150 million. This was before the COVID-19 pandemic. Last year, the amount dipped to $130 million.
Existing laws in the city as well as the amended version will see most of the investment alternative tax paid by casinos to go to Atlantic City. This should see an additional $50 million paid to the city from the 1.25% land-based gaming and 2.5% from online real money gaming.
Senate bill 4007 is backed by Senate President Stephen Sweeney. The goal of creating the bill was to ensure the casino industry could maintain stability as well as continue to provide for the city and county.
What Happens Without PILOT Changes?
If the bill is unable to move forward, then the PILOT plan will stay the same. This could result in the smaller casinos of Atlantic City closing down. There are two small venues operating in the region and another two would be put under financial stain due to the payment requirements.
The original PILOT will not allow casinos to maintain a portion of the investment alternative tax funds. Sports betting and online gaming revenues changed the way the individual casinos PILOT costs were determined, and this has created unfair payments for the venues.
According to Levinson, if the online services are removed from the basic PILOT plan, it would hurt county taxpayers because revenues would be limited going to share payments.
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