There’s no way to deny the fact that New Jersey is almost single-handedly responsible for expanded sports gambling in the U.S. The state’s continued fight with the Supreme Court finally paid off in May 2018, when the high court told lawmakers they were wrong to have approved PASPA, and New Jersey became one of the first states to take advantage of the reversal. However, the Garden State’s main gambling hub, Atlantic City, hasn’t reaped any benefits from the legalization of sports gambling and its new mayor wants to change this.
Mayor Marty Small calls it “unacceptable” that Atlantic City isn’t directly given any of the booty sports gambling provides the state in tax revenue. There’s a significant amount of money at stake, given that over half a billion dollars in wagers was seen in just July and August.
Small became mayor in October after the City Council unanimously approved his selection to replace ousted Mayor Frank Gilliam. Gilliam had been given the boot after pleading guilty to wire fraud, but resigned instead of being forced out. Those wire fraud charges stemmed from an investigation by the IRS and the FBI that determined that he had stolen $87,000 from a basketball program he had founded. The fact that he was involved in a public altercation outside the Golden Nugget late last year didn’t help his image.
At a meeting of the Atlantic City Taxpayer’s Association on November 7, Small expressed his opinion on the lack of tax revenue going to the city, asserting, “In 14 months, New Jersey has overtaken Las Vegas as the No. 1 sports betting destination, and a lot of it has to do with the success of Atlantic City, and a lot of it is online. But we don’t get one penny. Just think about that. That’s unacceptable.”
The sports gambling tax code is written in such a way that a certain percentage – 1.25% – of all wagers is destined for the Casino Reinvestment Development Authority, which was created “exclusively for tourism and marketing programs for the City of Atlantic City.” However, the city doesn’t control that fund; rather, the state does.
Part of the reason Atlantic City doesn’t control the fund is, apparently, because the city’s administration couldn’t be trusted. Good call, given Gilliam’s downfall. In the meantime, the state oversees its management, per former Governor Chris Christie’s order, and will continue to do so through 2021. Phil Murphy, the current governor, had run on a campaign ahead of the 2018 election that included returning control to the city, but changed his mind after seeing the instability once in office.
Murphy stated late last year after taking office, “Atlantic City is on the rise. But I don’t want to see this great and historical city on the mat again. This is not the end of our efforts. This is just the beginning.”
Until the city can demonstrate that it is responsible and knows how to properly manage its finances, the state government doesn’t plan on making any changes.