New Jersey Asks Judge To Stay Ruling Challenging Casino PILOT Program

Written By Derek Helling on September 29, 2022
Atlantic City taxes New Jersey casinos

The uncertain situation around the PILOT program for New Jersey casinos could get a little more concrete, at least in the short term. That’s provided a superior court judge in the state grants a motion from the New Jersey attorney general’s office.

The state plans to appeal a ruling that effectively nullified the most recent amendments to the law concerning taxation on Atlantic City casinos. In the meantime, New Jersey would like to proceed according to the tenets of that update.

Background of the New Jersey casinos tax lawsuit

This situation began last December when the state revised the Payments In Lieu Of Taxes program for casinos in Atlantic City. Instead of paying traditional property assessments on their operations and real estate, those casinos make an annual payment to the state based on their revenues.

The latest update to the program removed revenue from online gambling from that revenue-sharing formula. Proponents of the change argued that including such revenue in calculations was unfair because not all of the casinos in Atlantic City got the same percentages of their revenues from online gambling relative to their revenue from brick-and-mortar gaming operations.

Additionally, the argument stated NJ casinos were actually only getting a portion of the win from online casinos, poker, and sports betting. The state accordingly adjusted the law so that only revenue from retail gaming counts toward the PILOT equation.

That law saw an immediate challenge from Atlantic County, however. The county argued that the new amendment resulted in a diminished cut of the PILOT payments for its coffers. That lawsuit did not seek to overturn the new amendments wholesale, however.

Not long thereafter, another lawsuit from a group of citizens in New Jersey represented a wholesale challenge to the new law. Superior Court Judge Michael Blee ruled in favor of the plaintiffs in that case in August. That has brought the issue to this week’s update.

State asks Blee to stay ruling pending appeal

According to Michelle Brunetti Post of The Press of Atlantic City, New Jersey attorney general Matt Platkin has asked Blee to issue a stay on his ruling while the appeals process plays out. Platkin’s motion argues that the state can’t recover lost PILOT payments and can’t proceed without clear direction if Blee’s ruling stands while the state appeals his August decision.

Blee will hear oral arguments on the motion to stay on Oct. 7. It’s uncertain how quickly thereafter he might rule on the motion. To date, New Jersey has not filed its appeal of Blee’s August ruling. Should Blee grant the motion for a stay, the PILOT program will proceed according to December 2021 amendment until such a time as when an appeals court upholds Blee’s original decision.

If Blee denies the motion, regulators will have to examine their legal options for either proceeding according to the PILOT law without the December 2021 amendment or seeking other recourse. Regardless, the state’s supreme court might eventually weigh in on this issue.

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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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