Two pieces of legislation aimed at providing some measure of financial relief for a struggling Atlantic City casino industry hit hard by the coronavirus went in different directions Thursday morning.
The Assembly Appropriations Committee unanimously cleared a bill, A4022/S2257, that allows casinos and racetracks to deduct a portion of sports betting revenue taxes, while holding another proposed bill, A4032/S2400, that would provide both permanent and temporary tax breaks to Atlantic City’s gambling parlors as reported by the Press of Atlantic City.
The 11-member committee approved legislation permitting casinos and racetracks to deduct promotional gaming credits from gross sports betting revenue above certain thresholds from being taxed.
With many New Jersey casinos and racetracks utilizing promotional gaming credits to attract new sports betting participants, a bill sponsored by Assemblyman Ralph Caputo would allow these businesses to deduct those credits from their annual wagering revenue on tax returns. The legislation was advanced by the Assembly Appropriations Committee Thursday.
This bill (A4002) clarifies that sports wagering credits would be deducted from a casino’s sports wagering revenue, which is taxed separately from general gross revenue. In addition, this bill would make the deduction available to racetracks, which are excluded under existing law.
Upon the bill advancing, Assemblyman Caputo (D-Essex) issued the following statement:
“Despite an increase in online sports betting in recent months, many of our casinos and racetracks have suffered significant losses due to necessary closures and restrictions during this pandemic. At a time when many of these businesses are struggling to stay afloat and keep their workers employed, we need to help relieve any undue burden on the industry. This bill will allow these businesses to deduct revenue from free wagering credits given out to entice new players. It’s only fair casinos and racetracks be taxed on their actual sports wagering revenue and not a larger, inaccurate number that would increase taxes owed to the state.”