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Casino Tax Revenue in New Jersey Drops Significantly in 2020 due to Pandemic

Casino Tax Revenue in New Jersey Drops Significantly in 2020 due to Pandemic

The leisure, hospitality and tourism industries across the United States have suffered great losses this year due to the COVID-19 pandemic. In New Jersey, specifically Atlantic City, the losses have been far worse than in other regions. Atlantic City relies on casinos, hotels, entertainment venues, restaurants and bars for income. In 2020, these types of facilities have been impacted due to closures as well as limited capacity plus additional restrictions.

Gaming Tax Revenues

This year, gaming tax revenues have dropped considerably due to the pandemic. In March, the casinos of the city were shut down for almost four months to try and slow the spread of the virus. The deadly virus can spread easily, and people can be carriers without showing symptoms. This simple fact negated non-essential business closures across the US in the hopes that the virus would slow down.

When reviewing the first ten months of the year for gaming taxes, the drop is around 5.5% when compared to 2019. Only $12.7 million has been provided. The taxes from gaming revenues are placed in the Casino Revenue Fund. This is where land-based and online gambling tax payments go.

The money is then used to provide programs for disabled individuals as well as seniors in the state. Housing assistance is provided along with educational opportunities, vocational options, medical help and more.

Thankful for Online Gambling

While the decrease of 5.5% is considerable in the grand scheme of things, it could have been far worse. Because New Jersey has online gambling services, the tax payments from there helped to offset the losses. Online casino, poker and sports betting all brought in much-needed funds while the land-based casinos were shut down.

According to the coordinator of the Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton University, Jane Bokunewicz, the online gambling revenues earned during the first ten months of the year are more than double from 2019. This boost helped to provide more money to the state while casinos were inoperable.

What helps even further is that the online gambling industry is taxed at a higher rate. Online gaming has a tax rate of 15% which is almost double the land-based industry’s 8%. This year, through October 31, the online casino gross revenue taxes were up by over $59 million. In total, $117 million was generated in taxes from online casino gaming.

This amount counts for over 50% of the year-to-date gambling taxes paid in New Jersey. The online gambling industry is also not slowing down. There are still two more months of revenues to consider, November and December. If revenues continue to increase, the deficit will be cut even more.

Casinos continue to be operating at a lower capacity and new restrictions are in place. If the virus continues to be an issue, the traffic at casinos will stay at a low rate. However, vaccines may be issued soon, so this would help to provide more comfort to players who wish to visit casinos but are fearful of contracting the virus.