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New Jersey Senate Approves Temporary and Permanent Tax Breaks for AC Casinos

New Jersey Senate Approves Temporary and Permanent Tax Breaks for AC Casinos

Atlantic City has been basically shut down for three months now, considering the fact that casinos have been closed since mid-March. The venues are working to reopen and may be ready for July, but in the in-between time, many are worried that the region will suffer from harm due to loss of revenues. Atlantic City has only recently recovered from a financial crisis and the coronavirus shutdown could cause the region to fall down yet again. Thankfully, the state Senate approved temporary and permanent tax breaks on Monday that will help the casinos get back on track financially.

Changes to Come

A tax relief bill and legislation to provide interest-free loans to the casinos that made their payments in lieu of taxes, were introduced to ensure the economic engine of the gambling town will remain intact. The goal is to provide some stability so that Atlantic City can recover quickly.

Some senators in the state were concerned that cuts to programs for disabled individuals and seniors that are funded by casino taxes would be harmful, while giving breaks to a multi-billion dollar industry. However, the sponsors of the effort, Senator Chris Brown and Senate President Steve Sweeney feel that the casino industry needs to be stable for the state to succeed.

Senator Brown stated that his main concern continues to be the families who found themselves unemployed seemingly overnight and are left to deal with a system for unemployment that is broken. Taking a bipartisan approach, the newly passed measure will help save 27,000 jobs in the casino industry as well as help small businesses so families in Atlantic County can get back to work.

Known as S2400, the bill will reduce gaming revenue taxes for a one year time frame. This time frame will start when all nine casinos reopen. The bill also halts hotel fees through the end of this year. Certain licensing fees have been deferred and a permanent 100% deduction of provisional gaming credits and coupons against gross revenues is included.

With the measure, $100 million of federal grant money related to the coronavirus has been allocated to the state’s Economic Development Authority to provide assistance to small businesses. On Monday, the bill was amended to see the amount of time casinos will be allowed the reduction on taxes from gaming revenues. A break in fees for parking was also eliminated.

How It Will Help

With the changes of the newly passed bill in place, Atlantic City could see a reduction in taxes and fees paid by around $93 million in one year. The casinos in Atlantic City have been shut down since March 16 and no real date has been set for reopening. The state and local municipalities have missed out on hundreds of millions in payments due to the complete shut down.

The hope is that the passage of this bill will give casinos a monetary break as they start to reopen. A tentative time line has been given for July 4 to reopen, but that is not set in stone. If the casinos are able to reopen at this time, they would hopefully be able to see a nice turnout of players and begin pulling in revenues.

But, it is still unclear as to if players are ready to come back to the casinos due to the virus or if they will be willing to stick to whatever measures casinos put in place, be it less players at the gaming tables or wearing masks.