Atlantic City: tax exemption for casinos
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In the future, the casinos in Atlantic City will not have to pay wealth tax and thus save $ 55 million. According to the agreement, Phil Murphey, Governor of New Jersey, signed the new tax law with the name “Casino Aid Bill” and thus put an end to the ongoing speculation. A few months ago, Senator Steve Sweeney had given the Casinos of the US gambling metropolis out of the prospect due to the ongoing economic misery.
Atlantic City in the crisis
Atlantic City was once considered a gambling stronghold in the United States. The city in the state of New Jersey experienced its upswing in the 1920s and benefited from the Gambling. The metropolis of the golden years dragged for a long time, but today there is not too much left of the former glory. The gambling industry weakened since the nineties. Many facilities already had to close their gates. Atlantic City only houses nine casinos today, but they also economic difficulties have to fight.
Easy relaxation. For many industries, a slight recovery phase marked in 2021 after the Corona Year 2020. According to media reports, the gambling industry in Atlantic City had also experienced an upward trend. However, the positive development is deceptive. The online gambling and the sports betting decisively contributed to the fact that the industry was able to record an increase in sales. The terrestrial casinos, on the other hand, should have accepted 22 percent losses. Only the hard rock and the Ocean Casino were able to generate black compared to 2019.
The gaming industry is that Driving engine in Atlantic City. It provides countless jobs – both directly and indirectly. Accordingly, local politics does not want to answer the decline of the other casinos. For this reason, the outgoing senator presented a draft law in the summer of 2021 to free the gambling houses from wealth tax. After months of negotiations and analyzes, governor Phil Murphey has now signed the new tax law.
As can be seen from several US media reports, the nine casinos would save up to $ 55 million annually due to the elimination of wealth tax. However, the new tax law does not easily issue the entire amount, but see one minor redistribution before. A certain part of the sum should benefit the local education system and public institutions.
The exact amount of the taxes is based on the taken Gross player yields of the casinos. However, income from sports betting and online gambling leaves the new tax law unaffected. Politics had classified the argumentation of the local casino operators as conclusive that both areas have a high cost intensity. For example, a relatively large amount of money would have to be invested in the IT infrastructure and in providers.
Win-win-Situation. According to experts, the “Casino Aid Bill” brings advantages for both politics and for casinos. The gambling houses would have to pay less taxes per capita, but the total amount paid exceeds the budget of the wealth tax. It is predicted that New Jersey will take between $ 10 to $ 15 million more through the casinos in 2023.
The new tax law comes at the right time for the gambling industry in Atlantic City. For the year 2023, tax increases are planned, which the casinos also have to pay. However, the elimination of the wealth tax is now fishing the financial burden in an acceptable framework. Without the change in the law, according to Sweeney close two casinos immediately have to.
The New Jersey casino association had made itself strong for Senator Sweeny’s draft law from the start. The industry association reacted accordingly when governor Murphey has signed his signature under the new tax law. The decree of wealth tax and the financial redistribution, which run under the “pilot program”, are the right way to get the city’s casinos. The measures would not only ensure stability, but also Thousands of jobs in the city secure.
Pilot program. The new tax law in New Jersey is based on the pilot program, which was implemented in 2017 and explicitly for the casinos in Atlantic City. The program requires at least $ 120 million a year from the local casinos, state and county. The sum increases to up to $ 165 million if the total turnover exceeds the limit of $ 3.4 billion the following year. According to media reports, the gambling facilities would have generated around 3.85 billion by November 2021. However, calculating the sports betting and the online gambling gambles the yield to 2.34 million.