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Atlantic City’s casinos have been a major driver of the millions in tax revenue that New Jersey brings in each month, but the city itself does not see one penny from the sports betting conducted inside city limits.
This oversight could change if Mayor Marty Small Sr. gets his way, as the new mayor of Atlantic City is pushing for the state to cut the city in on the money brought in by the city’s sportsbooks.
“In 14 months, New Jersey has overtaken Las Vegas as the No. 1 sports betting destination, and a lot of it has to with the success of Atlantic City and online,” Mayor Small Sr. said during a meeting of the city’s Taxpayers Association. “But we don’t get one penny. … That’s unacceptable.”
In over a year of legalized sports wagering, New Jersey has handled over $3 billion in legal bets resulting in $284.6 million in gaming revenue and $36 million in taxes for the state.
Under the current law, leaders in Trenton where the state’s two racetrack sportsbooks are located, see a percentage of all winnings, but that is not the case in New Jersey.
Small, who just took over as mayor of Atlantic City after former Mayor Frank Gilliam resigned due to guilty plea to wire fraud, believes the city should receive proceeds from sports betting to offset local residents’ property tax.
“My first, and foremost goal, as it was as council president and will continue to be as mayor, is more rateables for the city and more revenue streams to offset our taxes,” he said.
Even though Atlantic City has eight sportsbooks within the city limits, the municipality does not receive explicit tax revenue from sports betting. But the original bill does earmark revenue from the city to the Casino Reinvestment Development Authority for marketing and promotion of the city’s casino area.
1.25% of all taxes generated by sports betting by Atlantic City casinos go to the CRDA, but unlike other cities that receive direct tax funding, the city remains on the outside looking in when it comes to sports betting tax revenue.
To date, the CRDA has received around $1.14 million, money that Small Sr. believes would be better served in reinvestment into the community rather than being spent on marketing. And the mayor is not the only one who believes that as members of the New Jersey state congress is looking for ways to help out the city’s government.
“Money generated in Atlantic City needs to stay in Atlantic City,” said Assemblyman John Armato.
While Small has not made a formal request to legislators like Armato, fellow Assemblyman Vince Mazzeo told The Press of New Jersey that the request would be seriously considered.
“In theory, it’s good to have advertising dollars for Atlantic City because it increases visitation, which, in turn, gets more people to spend money in Atlantic City,” Mazzeo said. “But, we need to be looking at long-term sustainability, and we’re certainly open to ideas for long-term property tax relief.”
With sports betting rapidly expanding, problems that Atlantic City is experiencing will certainly lead to more cities making sure that they are granted a small piece of the sports betting pie as legalization takes hold in new states and municipalities.
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