Atlantic City Casinos Proceed With Revenue-Sharing Payments, For Now

Written By Derek Helling on October 18, 2022 - Last Updated on October 20, 2022
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At least for the next 90 days, Atlantic City casinos know how to calculate revenue-sharing payments to the state. Beyond that point, though, the situation remains murky. A state judge granted a request for a stay on his own ruling that overturned a law governing those New Jersey casino payments.

When that stay expires, the situation could look altogether different depending on how appeals of two lawsuits play out. While the casinos themselves are not a party to either lawsuit, they’ll be watching both with great interest.

Judge issues stay in Atlantic City casinos PILOT payments lawsuit

According to Michelle Brunetti Post of The Press of Atlantic City, Atlantic County Superior Court Judge Michael Blee issued a stay of his earlier ruling on Friday. The state, the defendant in the case, had requested the stay as it is appealing Blee’s decision.

The lawsuit is about a December 2021 law that amended the existing Payments In Lieu Of Taxes (PILOT) formula that replaces property tax obligations for Atlantic City casinos. The new law removed revenues from online gambling from the calculations to determine the amounts of the annual payments.

The plaintiff, Liberty and Prosperity, sued the state, arguing that the law was unconstitutional. The premise for the argument was that the state was giving preferential treatment to the casinos that it did not extend to other businesses in the state.

Blee agreed with that logic and overturned the law. However, the state requested a stay, arguing the uncertainty of the situation would handicap its ability to collect payments as appeals were ongoing.

Blee has now granted that request, pending the state’s appeal. Blee did leave room to extend the stay if the appeals process is not complete within the 90-day time frame.

While the appeals process in that lawsuit plays out, there’s a separate but related matter that Atlantic City casinos are likely similarly interested in.

State also appealing related lawsuit

Earlier last week, Gov. Pete Murphy announced he would appeal a ruling from a different Atlantic County Superior Court judge that also concerns the same 2021 PILOT law. The plaintiff in that litigation is Atlantic County itself.

Murphy is the defendant and the dispute is over what percentage of the PILOT payments the state shares with Atlantic County. Both of these cases could end up before the state’s Supreme Court over the course of the next year.

Until those Supreme Court decisions come down, casinos in Atlantic City will be somewhat in limbo regarding the payments they make to the state. They do have some guidance on the immediate future, though.

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Derek Helling

Derek Helling is a lead writer for PlayUSA. Helling focuses on breaking news, including legislation and litigation in the gaming industry. He enjoys reading hundreds of pages of a gambling bill or lawsuit for his audience. Helling completed his journalism degree at the University of Iowa.

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