As the whole casino industry is desperately trying to crawl its way out of the COVID-19 pandemic, one area has been affected severely.
Atlantic City, once a gaming mecca in New Jersey serving nearly the whole eastern seaboard, has had a run of bad luck over the last several years, and the novel coronavirus only worsened things.
In efforts to help the region retain its remaining 9 casinos and keep the figure from shrinking, legislators in the Garden State have been exploring some bills that would offer the badly-needed economic breathing space. As of Monday 15, the gambling operators are one step closer to having their wish come true.
On Monday evening in Jersey, and as Senate lawmakers continued to discuss an endless stack of legislative moves, Senate Bill 2400 (SB 2400) was among the topics. Before the night would come to an end, lawmakers would approve the measure by a vote of 28-4, allowing casinos in New Jersey to get some relief on both their gross gaming revenue (GGR) tax liabilities and the yearly fees they pay. The measure is designed to both encourage gambling providers to stay around and to provide incentives to bring in many customers to their floors.
For 2 years following the reopening of operations, gambling operators could be off the hook for the 9.25% tax they typically pay on GGR. The final tax rate will be based on revenue compared to how it performed this past February, and the properties may not see the whole 100% reduction if they perform as well.
SB 2400 explains the reductions partly by stating: “(1) [For] each calendar month in which the gross revenues are less than 25 percent of the gross revenues for the same calendar month immediately prior to March 1, 2020, the gross revenues tax and investment alternative tax obligations shall be zero for each tax;
“(2) [For] each calendar month in which the gross revenues are at least 25 percent and not more than 49 percent of the gross revenues for the same calendar month immediately prior to March 1, 2020, the gross revenues tax and investment alternative tax obligations shall be 25 percent of the full amounts that would normally be due for each tax…”
The tax liability will additionally be offset by deducting some gaming anf incentive-based credits provided to patrons. Moreover, the $500 fee the gambling venues have paid every year for each slot machine they will operate has been removed from the books till the end of 2021.
Parking spaces and occupied hotel rooms that usually incur day to day government-led expenses will now be fee-free till the end of next year too.
Although the Senate has agreed, the General Assembly still has to consider the subject. There are stumbling blocks remaining and not everyone is in favour of the initiative. The Senate saw 4 “no” votes, but 8 other legislators decided not to voice their say at all.
Some think there is no room to provide any incentives to gambling operators because New Jersey is “as poor as it gets” already. Without casinos, however, the state’s domestic revenue drops even further. It would be another Detroit, Michigan.