In February, state taxes paid by casinos and racetracks in New Jersey amounted to almost $25.7 million. The casinos alone generated more than $24 million. It’s not chump change. The figures reflect 21 months of increasing overall gaming revenue, year over year.
That winning streak is now over with the March 16 closure of casinos in the state.
Based on data from the state Division of Gaming Enforcement (DGE)—excluding online gaming, internet sports wagering and state sales taxes—an estimated $738,261 in casino-related taxes and fees has been lost for each day the casinos have been closed. That estimate includes all land-based gaming revenue taxes, luxury taxes, parking fees, hotel room fees, tourism promotion fees, the progressive slot tax and expired vouchers, according to the Press of Atlantic City.
The one area where revenues will increase is online. If online revenues for March increase 50 percent over last March, it would generate an estimated $58.7 million. “But this would only make up about 26 percent of the $223.2 million generated by brick-and-mortar casinos in March 2019,” said Rummy Pandit, executive director, Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University.
According to DGE spokesman Lee Moore, the 15 percent internet casino gross revenue tax and the casinos’ 8.5 percent and 13 percent sports wagering taxes are deposited into the Casino Revenue Fund for programs that assist seniors and the disabled. The 8.5 percent and 13 percent sports wagering taxes for the racetracks go into the general fund.
Will the loss of revenues affect programs funded by the taxes? It’s a strong possibility, especially if the casinos remain closed into the busy summer months, said Pandit. “The longer the shutdown continues, the more difficult it will become to make up for lost tax revenues.”
And when the crisis ends, revenues will not be back to par right away.
Gaming, hospitality and tourism consumers may have less disposable income to spend in Atlantic City for some time, Pandit said, meaning the state’s revenue projections may continue to fall short. “So it’s compounded every which way,” he said.
