Those two casinos in the northern part of New Jersey could face a tax rate of between 40% and 60%, assuming state legislators get behind the plan.
Monday brought the second of two required public hearings on the New Jersey legislature’s plans to authorize the construction of two casinos in two separate counties in the northern part of the state. The controversial plan would require voter approval to amend the state constitution to permit casinos outside Atlantic City.
Among the hearing’s most notable revelations was Assemblyman Ralph Caputo’s suggestion that the new casinos would pay tax of 40-60% on their gross gambling revenue, a significant premium on the 9.25% effective tax rate paid by AC casinos, but which would dovetail with rates charged across the border in New York and Pennsylvania.
The actual rate facing the new casinos won’t be confirmed until the enabling legislation is released. A maximum of one-third of the sum collected would be funneled towards an as yet unspecified non-profit aimed at boosting AC’s sagging fortunes by promoting non-gaming activity.
Because of previous failures to achieve consensus by the stipulated deadline, the north Jersey casino legislation requires a 60% majority vote in both chambers to make it onto November’s ballot. While support appears to favor the bill’s passage, some legislators continue to argue that AC is already suffering from too much regional competition.
Assemblyman Chris Brown got off one of the day’s best lines by inquiring whether some of the tax revenue diverted to AC would help “pave the roads so that the people who are unemployed can get out of town.” Caputo retorted that Brown was “in denial” about AC’s true situation.
Debra DiLorenzo, head of the local Chamber of Commerce, offered historical data on the “truly undeniable” negative impact on AC from casinos launching in Pennsylvania and Delaware over the past decade. DiLorenzo noted that these facilities were within the same physical proximity to AC as the proposed North Jersey casinos.
Also mentioned was the recent threat by billionaire Carl Icahn to forego his planned $100m renovation of the Trump Taj Mahal casino, official ownership of which Icahn was granted last month, if voters approved the north Jersey casinos. Caputo brushed off these concerns, saying Icahn was “a big boy” who had “no agreement with the people of the state of New Jersey” related to his Taj Mahal purchase.
Legislators are expected to vote on the proposal later this month, possibly as early as next week.