COVID-19 caused Atlantic City casinos to see their brick-and-mortar gross gaming revenue (GGR) plunge 44 percent in 2020. New Jersey lawmakers want to help the nine resorts recover by reducing some of their tax obligations.
The New Jersey Legislature has sent a bill to Gov. Phil Murphy’s (D) desk that would possibly trim some of the eight percent tax on land-based gaming revenue. Senate Bill 2400 would reduce the eight percent tax if casino revenue in the months ahead is below that same month’s revenue generated in March 2019 through February 2020.
For example, if Borgata reports GGR of $60 million in June of 2021, the MGM Resorts casino’s eight percent tax liability would be cut by 25 percent. Borgata reported GGR of $64.8 million in June of 2019.
The larger the GGR decline, the larger the tax reduction. GGR of at least 75 percent to 99 percent of 2019 revenue for the same calendar month is reduced by 25 percent. For revenue of 50 percent to 74 percent of 2019 GGR, the eight percent is shaved by 50 percent.
For GGR of 25-49 percent, the tax is reduced by 75 percent. For casino revenue less than 25 percent, the eight percent tax is fully waived.