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New Jersey Governor Says Casinos Will Pay Fair Share Of Taxes

Written By Nicholaus Garcia on February 14, 2023 - Last Updated on September 22, 2023
revenue sharing atlantic city casinos lawsuit

New Jersey Gov. Phil Murphy expects a resolution to Atlantic City’s payment-in-lieu-of-tax (PILOT) program, saying recently that casinos should “pay their fair share.”

On Feb. 2, during his “Ask Governor Murphy” radio show on WNYC, the governor said:

“Tax fairness is really important to us, and it has been from day one. And if we don’t quite get it right, we’ll come back at it and do everything we can to get it right.”

Will Murphy follow through on the Atlantic City casinos commitment?

The dispute began last December when the state revised the PILOT program for casinos in Atlantic City. Lawmakers updated the program removing revenue from online gambling from that revenue-sharing formula. Instead of paying traditional property taxes, AC casinos make an annual payment to the state based on their revenues.

As a result of the change, NJ casinos in Atlantic City saved roughly $55 million in taxes last year. 

The conservative nonprofit Liberty & Prosperity 1776 is behind the most recent legal challenge to the PILOT law. The group states lawmakers can only provide a tax benefit to a specific industry if that industry provides a public service. 

In a statement, Seth Grossman of Liberty & Prosperity said:

“Governor Murphy failed to even mention our State Constitution, which requires casino real estate to be assessed and taxed the same as all other real estate. Once again, this governor is showing either ignorance or contempt for a document that he swore to comply with.” 

In August, New Jersey Superior Court Judge Michael Blee sided with the group, saying: 

“There is no evidence to suggest that casinos could not meet their PILOT obligations under the Original [2016] Act.”

Legal battle remains ongoing

During his radio show, Murphy said Atlantic City today is on a really “impressive trajectory.”

“When I think of where Atlantic City was in 2008, 2009, 2010, and where it is today, and when you put a pandemic in the middle of that timeline, the city, including the casinos, is on a really impressive trajectory. We will make sure as a state that the casinos pay their fair share.”

Despite talk from the governor, the legal challenge brought by Liberty & Prosperity 1776 remains in litigation. 

Photo by AP Photo/John Minchillo/PlayUSA
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Nicholaus Garcia

Nick Garcia is a senior reporter for PlayUSA. Garcia provides analysis and in-depth coverage of the gambling industry with a key focus on online casinos, sports betting and financial markets. Garcia has been covering the US gambling market since 2017. He attended Texas Tech University as an undergrad and received a Master of Arts in Journalism from Columbia College Chicago.

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