Officials in Atlantic City are not happy with the lack of financial benefits sports betting has had on the New Jersey town.
“In 14 months, New Jersey has overtaken Las Vegas as the No. 1 sports betting destination, and a lot of it has to with the success of Atlantic City and online,” Mayor Marty Small Sr. said during a recent meeting of the city’s Taxpayer’s Association. “But we don’t get one penny. That’s unacceptable.”
Small said he wants to see Atlantic City get the additional sports betting tax so it can be used exclusively for property tax relief.
“My first, and foremost goal, as it was as council president and will continue to be as mayor, is more rates for the city and more revenue streams to offset our taxes,” he said.
Atlantic City, as a host municipality to eight sports betting facilities, does not receive any direct tax revenue generated from sports wagering. Following the passage of a bill in 2018 to regulate and tax sports betting in New Jersey, lawmakers proposed a second piece of legislation, A4230, that imposed an additional tax on gross sports betting revenue.
The bill sailed through committees in the state Senate and General Assembly and was approved by both chambers with only one dissenting vote. Gov. Phil Murphy, who conditionally vetoed the original legislation, signed the bill into law in October 2018.
The bill mandates that an additional 1.25 percent tax generated by an Atlantic City casino from sports betting or a “joint sports wagering operation,” go to the Casino Reinvestment Development Authority for marketing and promotion of the city.
Meanwhile, East Rutherford, Oceanport and their county governments receive portions of the additional tax — .75 percent goes to the municipality and .5 percent to the county — for “economic development purposes, which shall include, but not be limited to, improvements to: transportation and infrastructure, tourism, public safety, and properties located on or near the racetrack.”
From the launch of legal sports wagering last year through the first six months of 2019, the additional tax has resulted in $1.14 million being directed to the CRDA and $1.4 million for the racetrack’s beneficiaries, according to data from the state Division of Gaming Enforcement.
Small emphasized that city officials are “ecstatic” about the “excitement and energy” that sports betting has brought and want the gaming industry in Atlantic City to prosper. But, the mayor and other elected officials believe that the city should reap some of the financial reward.
“Money generated in Atlantic City needs to stay in Atlantic City,” said Assemblyman John Armato, D-Atlantic, who voted in favor of the sports betting tax legislation, along with his district mate, Assemblyman Vince Mazzeo.
Any change to how the additional sports betting tax is directed would have to be the result of legislative action.