Atlantic City casinos’ gross gaming revenue surpassed US$4billion in 2021, making the year the best one since 2008. However, despite hitting the US$4 billion mark, land-based casinos in the largest gaming hub on the East Coast continue to face challenges.
Atlantic City was closed for casino enthusiasts for 107 days in 2020, and that forced gamblers to turn to online gaming. The same thing has continued to happen this year, and it is land-based casinos that are suffering the most once again.
According to Joe Lupo, the President of the Casino Association of New Jersey, the COVID-19 pandemic had an adverse effect on land-based casinos and continues to do so. He said that land-based casino profits were down by 5.5% in 2021 (through November). So, even though the state got another taxable revenue source in online gaming and betting, land-based casino profits were down.
The Challenge is to Increase In-Person Casino Visits
Casey Clark, Senior Vice President of the American Gaming Association, said that New Jersey was always “a strong gaming market.” He added that surpassing the US$1 billion handle mark for online sports betting as early as September was a testament to New Jerseyans appetite for legal and regulated gaming and betting.
However, things weren’t as good on the land-based casinos front. Tony Marino, a former Atlantic City Expressway executive, said that online gaming threatened in-person casino activity by decreasing the number of visitors to Atlantic City resorts. Unfortunately, according to Marino, casino restaurants, retail stores, and the city were all getting lower visitor volumes because of the drop in land-based casino visitors too.
Marino said that the challenge in 2022 was for the online gaming industry to continue to grow, while at the same time keeping Atlantic City as attractive as possible for in-person casino visits.
New Property Tax Payments Legislation for Land-Based Casinos
Only Hard Rock Casino & Hotel and Ocean Casino Resort reported gains for 2021 (through November). All seven other Atlantic City casinos posted declines in the amount of in-person profits from gamblers. They were down 22%.
The decrease in revenue prompted lawmakers to think about approving an amendment that would help casinos recover by reducing the increase in property tax payments they had to cover.
That doesn’t mean that casinos will pay less to the city, as they will continue to contribute to schools and the county as before. However, the payments casinos will make this year will be based on 2020 revenue figures, of course, if the bill passes.
Under the new legislation, Atlantic City casinos expect to pay only US$10 to US$15 million more next year. If the bill doesn’t pass, casino property tax payments are expected to increase by 50%.
The bill passing will be welcome news for land-based casinos in Atlantic City, as even though they report record revenue figures, they are still losing money on in-person gambling.
The record revenue numbers are down to online gaming and betting being revenue combined with in-person gambling gross gaming spend. That money must be shared with online gaming and sports betting platforms, and that doesn’t paint the real picture of gambling in Atlantic City.
The fact that the proposed bill doesn’t take into consideration online gaming and online sports betting revenue when calculating property tax payments for land-based casinos in Atlantic City should help fix that.
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