Atlantic City casinos were hit hard by the coronavirus pandemic in 2020 and the potential economic challenges ahead are concerning to one local lawmaker. Declining gambling revenue at Atlantic City casinos would result in lower tax payments to the city. It is a scenario that worries local officials because it threatens to undermine New Jersey’s efforts to stabilize Atlantic City’s finances.
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State Assemblyman John Armato, D-Atlantic, introduced a bill to alter the 10-year casino payment in lieu of taxes (PILOT) law. The legislation would revise the annual amount owed by the casinos for the next five years in light of COVID-19’s impact on the industry.
The amount Atlantic City casinos pay in annual property taxes is directly tied to gross gambling revenue. The casinos make payments based on total revenue from brick-and-mortar gambling, iGaming, and sports betting.
The unique arrangement is the result of a gambling revenue tier structure outlined in the PILOT bill, which was signed into law in 2016.