Judge won’t immediately block Atlantic City casino aid law

A Superior Court judge in Atlantic County Wednesday declined to temporarily block new changes to tax agreements between Atlantic City and the gambling mecca’s casinos, changes forecasted to cost the city and county tens of millions of dollars annually.

Judge Joseph Marczyk denied temporary restraints sought by Atlantic County, saying he did not want to prejudice either party without hearing all the facts first. The judge left the door open for the county to lodge another filing seeking temporary restraints.

A bill Gov. Phil Murphy signed into law Tuesday reduced the amount Atlantic City’s casinos must pay to the local government as part of a five-year-old payments-in-lieu-of-taxes program, which was intended to stabilize the city’s tax base by eliminating a rash of tax appeals filed by the city’s casinos.

The bill’s supporters said the changes are needed to keep the casinos and their jobs alive. Critics said it rewards casino owners at the expense of taxpayers.

The PILOT rules, set in 2016, tie the amount casinos pay Atlantic City to casino revenue. The county gets a share of the money. The changes signed into law by Murphy shift the revenue benchmarks. For example, a casino with gross gaming revenue of more than $2.9 billion will make a PILOT worth $120 million under the new rules. Previously, the amount due would have been $130 million.

The bill also bars revenue from online sports betting and gambling — the two fastest-growing sources of revenue for Atlantic City casinos — from being used to calculate gross gaming revenue.

The county alleges the changes violate a June 2018 settlement agreement in a case lodged over the creation of the PILOT program, which reduced the county’s tax base by $3.2 billion by exempting the casinos from property taxes.

Atlantic County Executive Dennis Levinson attested the new changes to the PILOT program would annually cost Atlantic County more than $7 million it was entitled to under the settlement. The lost revenue, he warned, could cause the county to cut services.

The parties are due for a conference before Marczyk on Jan. 4, though the judge said the court planned to move the case to mediation as soon as it could, suggesting the parties begin talks over a mediator.