The New Jersey legislature just sent a convoluted casino tax break bill to Governor Phil Murphy. In simple terms, the law will reduce the 8 percent casino tax if gaming revenue falls below a corresponding month’s revenue from March 2019 to February 2020.
For example, suppose Borgata generates gross gaming revenue of $60 million in June. The casino generated almost $65 million in June 2019, so the tax liability would be 25 percent less. The bigger the falloff, the bigger the tax reduction. The measure drew wide support from both chambers, according to Champion Deck.
Internet casino revenue is taxed higher, at an effective rate of 17.5 percent. Fifteen percent goes to the state, and 2.5 percent to a community investment fund. The bill also lets casinos hand out $90 million in tax-free promotional credits for the next two years.
“It is necessary for the state to take action to ensure the continued viability of the Atlantic City region’s financial condition, and to assist the region’s population in dealing with the financial and economic problems resulting from the Covid-19 pandemic,” the text of the bill read.
In related news, another bill in the Senate calls for voters to decide if betting should be allowed on games involving New Jersey college teams or games played in New Jersey involving teams from other states. Both types of bets are currently prohibited.
Yet another bill would allow charitable, religious and other similar groups to conduct bingo or raffles remotely, and a fourth measure would also call for a public referendum on a constitutional amendment to allow such groups to use the proceeds of those games to support their organizations. Currently, only veterans and senior citizens groups may use the net proceeds.
The Assembly still must take up the sports betting and the bingo and raffle bills.
