Atlantic City Wants Revenue from New Jersey Sports Betting

As the casino industry continues rapidly evolving, lawmakers are taking up a bill that would redistribute New Jersey sports betting revenue. Atlantic City, which is the home of all New Jersey’s casinos, would receive a portion of mobile wagering taxes.

If the bill passed, Atlantic City’s government could receive a windfall of up to $2 million per year. The city’s mayor stated he intends to divert the funds for property tax relief.

New Jersey Sports Betting Creating Large Sums of Revenue

Before New York allowed mobile betting, New Jersey was setting revenue records and taking in billion-dollar monthly handles. These funds continued to be strong after neighboring New York began regulating mobile wagers, though NJ is no longer the industry leader.

The Borgata Casino is one of the drivers of Atlantic City’s gambling industry. (AP Photo/Wayne Parry)

Still, the revenues have generated significant taxes for New Jersey’s state government. Though mobile betting is driving the large handle, with over 90% of wagers placed online, all the betting servers are hosted in Atlantic City. And now the city wants some of that revenue to flow back to the city’s coffers.

The new bill being debated in the state Senate in Trenton would specifically redirect a 1.25% tax on sports betting revenue. Currently, the money goes to the state’s Casino Reinvestment Development Authority to drum up business for the AC casinos.

Atlantic City Mayor Marty Small asked rhetorically: “When are we going to get our slice of the pie?” Supporters indicated that this is an opportunity to directly return money to taxpayers, one of the legislature’s top priorities.

Tax Revenue Measure One of Many Atlantic City Issues

Atlantic City casinos have been a hot-button topic during this year’s legislative session in Trenton. Along with this new measure to give the city some slice of the mobile sports betting taxes, lawmakers have addressed casino property tax relief and a possible smoking ban.

First, some of the nine Atlantic City casinos raised the specter of closing due to ongoing difficulties from the pandemic. While none of the casinos went on the record, they used their lobbying prowess to argue for additional tax relief.

Eventually, the New Jersey legislature passed a bill that allows the casinos to contribute a set amount of revenues in lieu of their county property taxes. The local Atlantic County government stated this would negatively impact their finances and cause a drop in the services they can provide. However, the casinos and their employee unions hailed the new law for saving thousands of jobs.

With tax relief granted, state lawmakers in New Jersey now want to remove an exemption to the state’s smoking ban for casinos. Like the tax relief bill, the casinos argue that banning smoking on the casino floor would cost them customers, revenue, and eventually lead to job-cuts. Still recovering from the pandemic is not the time to change the smoking rules, according to the casinos.

But proponents of the smoking ban appear to have momentum, as more and more state Senators sign on as co-sponsors of the bill. Some analysts even argue that a smoking ban could bring in new gamblers who avoid the casinos because of the hazy atmosphere.