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N.J. lawmakers raise taxes on casinos

Jul 8, 2003 7:29 AM

Casino parking, a freebie in Las Vegas but an expense to customers in Atlantic City, becomes an even greater expense with the passage of the contentious New Jersey state budget last week.

As part of the insistence by Gov. Jim McGreevey that casinos should contribute at least $90 million more in state tax revenue to resolve a budget crisis, casino parking was increased from $2 to $3 with all the money going to the state.

But, the tax increases on gaming didn’t stop there. The new tax bill provides that the casinos would be taxed on their rooms, meals and show tickets they provide their favorite customers as complimentaries (comps). That 4.25% tax is expected to raise about $26 million.

A $7.5% tax on casinos’ net profits will add another $20 million to the state’s coffers while a daily room tax of $3 should generate another $14 million. Another $10 million is expected to come from slot machine manufacturers of progressive systems.

The various tax schemes resulted from opposition to McGreevey’s original plan to raise the tax on gaming revenues from the established 8% to 10%. He also had suggested he would permit the state’s racetracks to install slot machines, providing direct competition to Atlantic City’s daytrippers. Both ideas were shot down through stiff lobbying by the casino industry.