Atlantic City’s Casinos Used the Excuse of Covid to Get a Huge Tax Break, But They’re as Lucrative as Ever

Despite growing profits, casino operators used predictions of “grave danger” to convince the state to slash their tax burden, denying millions to the city, its school district and the county.

By Propulica --06/02/22 5:00 AM Photo: Mark Makela/Gett y-images

This article was produced for ProPublica’s Local Reporting Network in partnership with The Press of Atlantic City. Sign up for Dispatches to get stories like this one as soon as they are published.

In the fall of the second year of Pandemia, Atlantic City's casino managers painted a dark picture in the New Jersey Council. Their fixed organizations were aware of trouble. He said he was not able to see the prosperity of the online gambling business, and said that the casino actually lost most of the profits and left the online gambling business.

If politicians do not reduce the amount of casino tax suppression, industry officials predict the "serious crisis." The State Council has further warned that four of the nine casinos could actually be closed.

This tactics worked. The members of the Diet questioned the closure and dissolution and immediately concluded the tax cut without asking us useful questions. "Everything is in place," said Phil Murphy, who signed the law on December 21, one day behind, as found out by the two ministry.

The law has changed the formula of how much the casino is paid to the city, school districts, and counties. With this change, this year, the company will pay these organizations at $ 55 million than in other cases, and the reduction will be substantially Dyspractically to the Atlantic City, Moscow's poor cities. 。

What is the problem? However, the casino cried in poverty.

Atlantic City casino revenues reach 2019 levels

Gambling companies were given tax reductions, but they had already recovered from pandemic retreat and have noticed the benefits of increased value in 2019. Casino's parent company still has 1 billion won in the purchase of companies engaged in online game s-they will definitely help secure good income from online fees, not only money and federal national authorities. , According to a public statement by a casino, the supporters implemented by Atlantic City and Propabrica.

In 2021, the industry's gross profit in the Atlantic City was about $ 767 million, the best indicator for more than 10 years. However, due to the change in the law, it will pay $ 110 million in the name of the main district, which is the shortest necessary amount for the entire fiv e-year allowance, and is less than a year ago. (How did you plan a casino-see the depth of the crackdown).

"Is such a profit and a tax reduction of such a scale possible?" He talks as an executive director of the Casino Reinvestment Bureau.

The discussion is performed by paying a tax program circle called a pilot, that is, the property tax. The project was adopted in 2016 to enable expensive discussions led by Atlantic City, fighting his property evaluation and driving Metropolis on the verge of bankruptcy. In other words, each casino has paid a general tax share designed by summing up the gambling income of the previous year. From the beginning of the system, Atlantic City received most of the trials, and the payment was within 30 % of the on e-year buttish metropolis. However, this year, a casino company did not want to grow a casino to some extent, because at the same time, separate tax incentives were being caught.

Casino Business has risen rapidly in contrast to the reality of Atlantic City, who has been looking for a way to escape from the state of the state that is closest to financial collapse since 2016, when New Jersey introduced the state coordination. This year's highest inflation and cost increase are estimated to receive $ 91, 000 from the casino district tax, and in fact, $ 5 million less than last year. This would not be a big deal for a big city, but in fact, this year's casino tax revenue was more than the previous year. If the lawmakers had not revised the tax law, Atlantic City would have received $ 133 million this year.

Atlantic City has one of the highest foreclosure rates in the nation

And, according to most features, Atlantic City requires funding.

In the United States, which has many blacks and Hispanic, more than 30 % of residents are poverty. According to New Jersey's last report, the mortality rate of infants in the city is terribly high, and the blood lead concentration of children is higher than in the New Jersey. There is a supermarket of the perfect cycle in the shadow of the bright and shining tower of a wel l-known fou r-mile embankment.

Okrug Atlantic (the Atlantic coast area) was once a region with the most valuable value of the country in the country, but still has the potential to feel. The new taxation method is a area that brings about $ 19 million and a low $ 3 million area than expected, and indicates the calculation of the area that actually leads to what is the right five years. State authorities have filed a lawsuit with the state to save their own share of tax revenue, but basically, the reductions can provide various medical programs and offer for veterans, elderly and disabled people. He says that it will be gone.

On the other hand, the industry defends the new law.

In response to PROPUBLICA and Atlantic City Press, he is the representative of the Casino Noggie Association, President Hard Rock Hotel & AMP; AMP; Casino Altrantic City has a huge share of funds from Internet games. He said that the number of prompt profits distinguishes the distorted ideas of the industry. "If you refuse to adjust the pilot, it goes without saying that affiliate will hit to adjust COVI D-19 yet, but it will be inappropriate and unfair tax for branches." The statement is stated.

According to the latest industrial amount report published by local government authorities last month, gambling for housing exceeded the scope of pandemic.

MGM Resorts International, Borgata Hotel Casino & Amp; AMP; Spa and Atlantic City Market also defended the pilot change. "In relation to our own position, we are seriously the main employer of the company and our favorite, we will make an Atlantic City's financial victory and important efforts and resources in the future." Our value. Is considered value to protect the structure so that each business operator brings a fair. "

Last year, Steve Suini, a former member of the House of Representatives, who led legislative initiatives, has a unique world view. "The casino would have been closed." We made everything that had a chance in a bad story. We helped Atlantic City and worked. "

Murphy denied the spokesman's remarks.

For district staff and state authorities, but new laws on pilots have begun a lon g-standing discussion over whether Atlantic City has been deprived, and has not paid attention to politicians for more than 40 years. The legalization of gambling will definitely be useful for the resurrection of the sluggish association.

"Because they are good partners, they use it, but there is a difference," said the city council member Jessie-Karts, a republican member of the sixth district, standing on the other side of the law. 。 Responding to < SPAN> PROPUBLICA and Atlantic City Press, he is the representative of the Casino New Jersey Association, the President Hard Rock Hotel & AMP; AMP; Casino Otrantic City receives an online affiliate share huge share from Internet games. He stated that the number of prompt profits is distorted in the industrial state. "If you refuse to adjust the pilot, it goes without saying that affiliate will hit to adjust COVI D-19 yet, but it will be inappropriate and unfair tax for branches." The statement is stated.

A new tax system for Atlantic City

According to the latest industrial amount report published by local government authorities last month, gambling for housing exceeded the scope of pandemic.

MGM Resorts International, Borgata Hotel Casino & Amp; AMP; Spa and Atlantic City Market also defended the pilot change. "In relation to our own position, we are seriously the main employer of the company and our favorite, we will make an Atlantic City's financial victory and important efforts and resources in the future." Our value. Is considered value to protect the structure so that each business operator brings a fair. "

Last year, Steve Suini, a former member of the House of Representatives, who led legislative initiatives, has a unique world view. "The casino would have been closed." We made everything that had a chance in a bad story. We helped Atlantic City and worked. "

Murphy denied the spokesman's remarks.

For district staff and state authorities, but new laws on pilots have begun a lon g-standing discussion over whether Atlantic City has been deprived, and has not paid attention to politicians for more than 40 years. The legalization of gambling will definitely be useful for the resurrection of the sluggish association.

"Because they are good partners, they use it, but there is a difference," said the city council member Jessie-Karts, a republican member of the sixth district, standing on the other side of the law. 。 In response to PROPUBLICA and Atlantic City Press, he is the representative of the Casino Noggie Association, President Hard Rock Hotel & AMP; AMP; Casino Altrantic City has a huge share of funds from Internet games. He said that the number of prompt profits distinguishes the distorted ideas of the industry. "If you refuse to adjust the pilot, it goes without saying that affiliate will hit to adjust COVI D-19 yet, but it will be inappropriate and unfair tax for branches." The statement is stated.

According to the latest industrial amount report published by local government authorities last month, gambling for housing exceeded the scope of pandemic.

MGM Resorts International, Borgata Hotel Casino & Amp; AMP; Spa and Atlantic City Market also defended the pilot change. "In relation to our own position, we are seriously the main employer of the company and our favorite, we will make an Atlantic City's financial victory and important efforts and resources in the future." Our value. Is considered value to protect the structure so that each business operator brings a fair. "

Last year, Steve Suini, a former member of the House of Representatives, who led legislative initiatives, has a unique world view. "The casino would have been closed." We made everything that had a chance in a bad story. We helped Atlantic City and worked. "

Murphy denied the spokesman's remarks.

For district staff and state authorities, but new laws on pilots have begun a lon g-standing discussion over whether Atlantic City has been deprived, and has not paid attention to politicians for more than 40 years. The legalization of gambling will definitely be useful for the resurrection of the sluggish association.

"Because they are good partners, they use it, but there is a difference," said the city council member Jessie-Karts, a republican member of the sixth district, standing on the other side of the law. 。

Since New Jersey's first casino opened in Atlantic City in 1978, Atlantic City's fate has been tied to gambling. The casino industry has developed rapidly, and most of it has been located on the worl d-famous Atlantic City embankment, and has recorded the number of visitors every day for nearly 30 years. The taxes on the operation of the casino and the associated fees related to the state were $ 1 billion (about 100 billion yen). This tax is a property tax, which is the main source of revenue of the city, and another tax for providing funds to social plans. The last tax called IAT was founded in 1984 to protect investment in Atlantic City.

Gaming Industry Pushes for Change

This is the world's simultaneous recession in 2008, the 2012 Sandy Storm, and the gambling legalization in the neighboring states. When the casino appeared, gambling companies safely handle their property tax accounts safely. According to the ward's archives, their real estate prices collapsed from $ 13. 7 billion in 2008, and in 2016, when only seven facilities were open, $ 3. 2 billion. As a result, the profits from taxes in the ward have rapidly decreased, and the city's time has grown into a major person for this to cover the cost of refund of the property. (Today, tw o-thirds of Atlantic City's debt of $ 456 million are due to bonds sold to cover the returned data).

This obligation has restricted Atlantic City's investment in infrastructure. Apart from this, the city has reduced the number of police and reduced 10 staff.

When the capital was in danger of exceeding the debt, the gambling company came up with another tax project and provided it for several years to get the necessary support in Trenton and to be hired in 2016. For the right 10 years, the casino will pay for the number of guest rooms in the hotel and other items related to the gross gap work in exchange for the classic property tax payment.

The bill established by the New Jersey Casino Association was paid in 2017 to $ 120 million and was linked to the total amount of pilots for indicators in all other nine years. If the decrease, the payment decreased. < SPAN> Since the first casino in New Jersey opened in Atlantic City in 1978, Atlantic City's fate has been tied to gambling. The casino industry has developed rapidly, and most of it has been located on the worl d-famous Atlantic City embankment, and has recorded the number of visitors every day for nearly 30 years. The taxes on the operation of the casino and the associated fees related to the state were $ 1 billion (about 100 billion yen). This tax is a property tax, which is the main source of revenue of the city, and another tax for providing funds to social plans. The last tax called IAT was founded in 1984 to protect investment in Atlantic City.

This is the world's simultaneous recession in 2008, the 2012 Sandy Storm, and the gambling legalization in the neighboring states. When the casino appeared, gambling companies safely handle their property tax accounts safely. According to the ward's archives, their real estate prices collapsed from $ 13. 7 billion in 2008, and in 2016, when only seven facilities were open, $ 3. 2 billion. As a result, the profits from taxes in the ward have rapidly decreased, and the city's time has grown into a major person for this to cover the cost of refund of the property. (Today, tw o-thirds of Atlantic City's debt of $ 456 million are due to bonds sold to cover the returned data).

This obligation has restricted Atlantic City's investment in infrastructure. Apart from this, the city has reduced the number of police and reduced 10 staff.

When the capital was in danger of exceeding the debt, the gambling company came up with another tax project and provided it for several years to get the necessary support in Trenton and to be hired in 2016. For the right 10 years, the casino will pay for the number of guest rooms in the hotel and other items related to the gross gap work in exchange for the classic property tax payment.

The bill established by the New Jersey Casino Association was paid in 2017 to $ 120 million and was linked to the total amount of pilots for indicators in all other nine years. If the decrease, the payment decreased. Since New Jersey's first casino opened in Atlantic City in 1978, Atlantic City's fate has been tied to gambling. The casino industry has developed rapidly, and most of it has been located on the worl d-famous Atlantic City embankment, and has recorded the number of visitors every day for nearly 30 years. The taxes on the operation of the casino and the associated fees related to the state were $ 1 billion (about 100 billion yen). This tax is a property tax, which is the main source of revenue of the city, and another tax for providing funds to social plans. The last tax called IAT was founded in 1984 to protect investment in Atlantic City.

This is the world's simultaneous recession in 2008, the 2012 Sandy Storm, and the gambling legalization in the neighboring states. When the casino appeared, gambling companies safely handle their property tax accounts safely. According to the ward's archives, their real estate prices collapsed from $ 13. 7 billion in 2008, and in 2016, when only seven facilities were open, $ 3. 2 billion. As a result, the profits from taxes in the ward have rapidly decreased, and the city's time has grown into a major person for this to cover the cost of refund of the property. (Today, tw o-thirds of Atlantic City's debt of $ 456 million are due to bonds sold to cover the returned data).

This obligation has restricted Atlantic City's investment in infrastructure. Apart from this, the city has reduced the number of police and reduced 10 staff.

When the capital was in danger of exceeding the debt, the gambling company came up with another tax project and provided it for several years to get the necessary support in Trenton and to be hired in 2016. For the right 10 years, the casino will pay for the number of guest rooms in the hotel and other items related to the gross gap work in exchange for the classic property tax payment.

The bill established by the New Jersey Casino Association was paid in 2017 to $ 120 million and was linked to the total amount of pilots for indicators in all other nine years. If the decrease, the payment decreased.

For business and Atlantic City, the new system had clear advantages. The casinos would no longer have to fight property taxes in court, saving both sides time and money. Plus, they could count on predictability by setting aside the amount in the budget for each fiscal year for the next 10 years.

The 2016 bill also included another tax break for gambling operators, giving them a discount on the alternative investment tax that casinos pay to fund public projects. In the short term, the change would hurt Atlantic City, but lawmakers made sure the tax breaks weren't forever: They would expire midway through the pilot program, and in 2022 the city would get the full tax break again.

Governor Chris Christie signed the pilot legislation in 2016. To prevent what would have been New Jersey's first municipal bankruptcy since 1938, he placed Atlantic City under state conservatorship, giving the state the power to manage significant parts of the local government, including its budget.

But the bad times weren't over for the casinos. The two closed properties, the Trump Taj Mahal and the Revel Casino Hotel, changed hands and then reopened in mid-2018 as the Hard Rock and Ocean Casino Resorts, respectively. Meanwhile, online gambling flourished, pumping hundreds of millions of dollars into the industry. Legalized in 2013 and requiring computer servers to be located in Atlantic City, the industry has nearly quadrupled its revenues in New Jersey in just six years. The increase accelerated in the second half of 2018, spurred by the legalization of sports tariffs in the state.

Gross results showed that gaming revenues grew in 2018 and again in 2019. Trial payouts also picked up, reaching $152 million in 2020, well above the initial $120 million, but as the industry expects, this will be something of a ceiling.

The threat of four casinos closing

At the same time, the temporary alternative investment tax system expired, meaning businesses would have to pay the full amount again starting in 2022.

To some industry executives, the pilot program was starting to look like a losing bet.

So they turned to a key ally.

For more than 10 years, Steve Swoney has led New Jersey politics as a Senator. As a Democratic member of South Jersey, he has the second power after the governor and has solved all problems, from school to public pensions and renewable energy.

But last year, his political ending was surprising as the Republican waves rushed. In the November election, he lost an unknown truck driver without political experience. In a few months, he returned to Trenton to handle the work left behind. The agenda was to reduce the tax burden on the gambling industry.

In particular, Swoney has submitted a bill that excludes all income from online games from the Pilot method.

The bill competes the leaders of the market, which has opened online gaming revenue for several months. Lupo, a hard rock, has led the attack with an important claim that "casino technology partners are eating most of online gambling."

According to a spokeswoman for the New Jersey Casino Association, New Jersey's unique casino platform accounts for 20 % to 25 % of the total online income. However, the PRESS OF Atlantic City/Problica survey suggests that gambling companies are increasingly taking measures to reduce or eliminate thir d-party costs, which can rise during the Pilot program.

“When Are We Going to Get Our Fair Share”

At a press conference in late November, Atlantic City's Mayor Marty Small supported the industries for changing the Pilot.

"We are guaranteed that we will not be worse than last year," said the mayor Small.

His advisor is Stephen Persky, a former judge who broke the casino regulations, which legalized gambling in Atlantic City. Perskey quoted a "comprehensive" financial analysis of the state Pilot tax. "The impact of the tax hike in 2022 will bring a considerable part of the industry into a very severe financial situation," he told reporters.

Perskey said that the new Pilot method would help prevent this. < SPAN> For more than 10 years, Steve Swney has led New Jersey politics as a Senator. As a Democratic member of South Jersey, he has the second power after the governor and has solved all problems, from school to public pensions and renewable energy.

But last year, his political ending was surprising as the Republican waves rushed. In the November election, he lost an unknown truck driver without political experience. In a few months, he returned to Trenton to handle the work left behind. The agenda was to reduce the tax burden on the gambling industry.

In particular, Swoney has submitted a bill that excludes all income from online games from the Pilot method.

The bill competes the leaders of the market, which has opened online gaming revenue for several months. Lupo, a hard rock, has led the attack with an important claim that "casino technology partners are eating most of online gambling."

According to a spokeswoman for the New Jersey Casino Association, New Jersey's unique casino platform accounts for 20 % to 25 % of the total online income. However, the PRESS OF Atlantic City/Problica survey suggests that gambling companies are increasingly taking measures to reduce or eliminate thir d-party costs, which can rise during the Pilot program.

At a press conference in late November, Atlantic City's Mayor Marty Small supported the industries for changing the Pilot.

"We are guaranteed that we will not be worse than last year," said the mayor Small.