With Atlantic City casinos reopened but facing financial challenges as a result of earlier COVID-19 closures and reduced guest capacity, Assembly Democrats Louis D. Greenwald, Vincent Mazzeo, John Armato and Carol Murphy sponsor a bill that would provide financial relief to the industry. The legislation passed the full Assembly Thursday, 71-5-3.
The bill (A-4032) takes a multi-pronged approach to providing financial assistance to casinos, thereby stimulating the local economy. Under the bill, all savings must go towards hiring or re-hiring employees, attracting patrons, marketing events and other beneficial activities rather than towards stock purchases or employee bonuses.
“This legislation aims to provide a fiscal path forward for an industry that has been devastated by the effects of this crisis,” said Assembly Majority Leader Greenwald (D-Camden, Burlington). “The gaming and hospitality sector accounts for more than 15 percent of the region’s economy, and this pandemic will no doubt have a significant impact on Atlantic City’s hard-earned economic progress. Providing this relief now will help propel the industry through recovery in order to get the city back on track and most importantly, keep people in the workforce.”
While Atlantic City was on the road to economic recovery prior to the pandemic, the casino closures from March 16 to July 2 led to a year-to-date revenue decrease of at least 29 percent. This loss of revenue, in turn, led to mass layoffs affecting thousands of local residents and causing the region to have more than double the State’s overall unemployment rate in June.
Although casinos have since reopened, they are currently operating at 25 percent capacity – making it difficult to recoup losses and keep workers employed. With the local economy significantly dependent on the leisure and hospitality sector, the entire region has been affected.
“These measures will help bring stability to the thousands of casino and gaming employees in the Atlantic City region,” said Assemblywoman Murphy (D-Burlington). “Right now an entire city is facing an uncertain future, which is why it is so important we offer our assistance during this challenging and unprecedented time.”
Under the bill, any fees that are required to be deposited into the Casino Control Fund – other than those associated with internet gaming/wagering – would be deferred during the period the casino licensee remains closed due to the COVID-19 Public Health Emergency and State of Emergency, and during the six-month period following reopening.
“Atlantic City’s casinos are critical to the residents of South Jersey,” said Assemblyman Armato (D-Atlantic). “The industry plays a major role in the local economy while employing thousands of workers. When it thrives, the whole region benefits from its success; when it struggles, we all feel the effects. Ensuring the industry’s ability to swiftly hire back the many people who are still unemployed would help prevent financial hardship for countless families.”
Additional financial relief would come in the form of annual slot machine license fees being reimbursed from July 1, 2020 through October 30, 2020. Further, the definition of ‘promotional gaming credits’ would be expanded while the tax deductions for these credits would be temporarily increased during the 12-month period following a casino’s reopening.
During that same period, casinos would also see their gross revenue tax obligations reduced, depending on how much their revenue has decreased each month in comparison to the same calendar month immediately prior to March 1, 2020.
The bill makes sure to prioritize funding from the Casino Revenue Fund for the New Jersey Transit Senior Citizen and Disabled Resident Transportation Assistance Program to ensure its continuation even with reduced casino revenue.
“Atlantic City’s casinos are open and ready to offer guests a safe, enjoyable experience,” said Assemblyman Mazzeo (D-Atlantic). “Prior closures and current safety measures have presented these businesses with economic challenges that are affecting families throughout the region. Offering a helping hand during this difficult time will help ensure the resiliency of this vibrant city and stability for its residents.”
The bill now heads to the Senate.