New Jersey state has filed a motion for a stay of a judge’s August 29 decision that would strike down any amendments to the casino payment-in-lieu-of-taxes (PILOT) legislation, pending approval.
Amendments to the original 2016 PILOT law granted Atlantic City’s casinos' tens of millions of dollars in tax breaks by removing internet and online sports gaming from calculations of casinos’ gross gaming revenue. This made it very popular among casino operators in the city.
The PILOT law offers programs to participating businesses that exempt them from property taxes. Proponents argue this means that more companies will invest in Atlantic City without worrying about shooting themselves in the foot.
At present, Atlantic City has problems with urban decay. Soaring property taxes meant that many businesses, including casinos, have challenged valuations. Performing re-assessments and defending the results is a costly process for the state judiciary system.
However, opponents of PILOT argue that it is an unfair tax break for casinos and offers them preferential treatment over different kinds of businesses. This refers to the tens of millions in profit that casinos gain from the amendments, which allow for tax-free online sports gaming from retail casinos.
While the state’s motion has been filed, an actual appeal has yet to be made. Atlantic County superior court judge Michael Blee is scheduled to hear oral arguments regarding the request for a stay on October 7.
In his decision in a lawsuit brought by the NPO organization ‘Liberty and Prosperity,’ Blee ruled that amendments to the PILOT law passed in 2021, signed by Governor Phil Murphy, were passed on dubious grounds. He claims that they violated the state constitution by favoring an industry over a public purpose.
