New Jersey has been a pioneer in the online gambling industry and lawmakers recently approved a five-year extension of the current gambling legislation, providing a boost to the state’s thriving online gambling market and top U.S. sportsbooks.
Murphy Signs Bill
New Jersey Governor Phil Murphy has put his pen to paper in signing a five-year extension of the online gambling pact that will ensure the state’s tax coffers continue to swell with its proceeds.
Senate Bill S-3075 had vast bipartisan support as well as the full backing of the casinos that operate in the state. However, some legislators sought only a two-year expansion but casino operators lobbied for a longer term. The five years were viewed as a compromise between the two parties on an issue that won’t rear its head again until 2028.
Once the legislation was signed, a vocal proponent of online gambling, Senator Vince J. Polistina, said, “The legalization of online gambling and sports betting was a catalyst for struggling casinos in the aftermath of the Great Recession. It has created a number of good-paying jobs and has generated millions of dollars in tax revenues for the state.”
The economic impact of online gambling in the Garden State reverberates across the state creating job growth in the gaming industry as well as ancillary markets such as the service and hospitality industries.
Operators Pushed for a Decade Extension
Mark Giannantonio, President & CEO of Resorts Casino Hotel, and the Casino Association of New Jersey, urged lawmakers to consider a 10-year extension as he contended it would be in the best interests of the state and local economy, as well as the gaming industry in New Jersey.
“The reauthorization of the internet gaming bill for 10 years is vital to the continued success of the gaming industry in New Jersey and the programs that are supported by the taxes collected,” said Giannantonio.
It was anticipated that the 10-year extension would have been a done deal but an ongoing dispute between Atlantic City and the state regarding the requirement for its casinos to pay a flat fee for revenue each year in lieu of taxes was likely the reason why the extension was modified to just five years.
City officials believed the adjusted payment structure adversely affected its share of the casinos’ revenue which precipitated a lawsuit launched against the state. The shorter extension is likely a retaliatory measure by state lawmakers in response to Atlantic City’s litigation.
Wayne Parry of the Associated Press has been covering the proceedings and stated, “No explanation was given for either of the changes, and top Democratic leaders did not respond to requests for comment Tuesday and Wednesday.”
The Payments In Lieu Of Taxes (PILOT) program was instituted by the state which stipulates that the Atlantic City casinos pay based on their revenues, not their traditional property assessments, as had been the standard. This has turned into a legal brouhaha that has ensnared local and state politicians as well as the casinos themselves.
Nevertheless, there is too much money at stake to interrupt the flow of revenue to state and local coffers which is why the middle ground was chosen. As for which sides will win and lose on the ongoing litigation, that story will be told in the coming months.