Gov. Murphy Signs Bill to Send Sports Betting Taxes to CRDA
Last week in Atlantic City, New Jersey, Governor Phil Murphy signed legislation that will send 1.25 percent of gross sports gambling revenue to the Casino Reinvestment Development Authority. The new tax will take effect in December. It went under the radar with many media outlets until the last few days when pundits and bettors started taking notice.
The CRDA already received 1.25 percent of gambling revenue from casinos in the state. This tax will be in addition to the 8.5 percent of tax revenue generated at land-based casinos and the 13 percent tax from online and mobile sports betting that casinos pay to the state.
Sports Betting in New Jersey
Legal sports betting opened in New Jersey at its racetracks and casinos in mid-June after the Supreme Court decision in May that overturned the federal ban. Since then, the state has generated almost $16.5 million in revenue; $8 million of that from Atlantic City casinos and their mobile or online partners.
Casino Reinvestment Development Authority
The CRDA is a New Jersey government agency founded in 1984 with the responsibility of directing the spending of casino reinvestment funds in both private and public projects that will benefit Atlantic City and the rest of the state.
The revenue sent to the CRDA from sports gambling will be used for the promotion and marketing of Atlantic City.
The CRDA has 17 members including two casino representatives, one member of the Casino Control Commission, the Mayor of Atlantic City, the Attorney General, the State Treasurer, and others.
Tax revenue collected from the two state racetracks that offer sports betting will be sent to the facility’s host municipality instead of going to the CRDA.
The state Legislature in 2016 redirected the casino investment alternative tax (IAT) to pay off Atlantic City’s debt. These IAT funds were previously the main source of revenue for the CRDA so its loss was definitely felt. The new tax money paid by casinos will boost its budget, which since 2016 has relied on room and parking fees and luxury taxes. The loss of IAT money was almost $22 million.
CRDA director of communications and marketing, Larry Sieg made the following comments about an increase of funds according to the Press of Atlantic City:
“After a three-year hiatus, we are looking forward to filling the void with much-needed promotion of Atlantic City as a world-class vacation destination. Our team looks forward to having the opportunity to once again get the DO AC brand into the consumer market to increase visitation and economic impact.”
Opposition to this New Bill
Mayor of Atlantic City Frank Gilliam, who sits on the CRDA Board of Directors, isn’t happy about the CRDA getting money taken from businesses in Atlantic City. On Tuesday, Gilliam made the following comments:
“As mayor, I’m never going to be happy with revenue generated in Atlantic City going to a state agency when it could have been used to help the city. History has shown that marketing money has not been spent wisely.”
An Audit of CRDA
In September, the state released a performance audit of CRDA. This was the first audit done in the entire 34-year history of the agency, and it showed several instances of fiscal waste and mismanagement in addition to operational deficiencies. The audit only covered 17 months, but it showed that deals with LiveNation’s summer beach concerts and the Miss America Organization as having lacked proper return on investment protocols.
The audit reported that the agency improperly monitored the performance of the contracts and projects it funded, and furthermore, changed some contracts without board approval. Some of the money given out by CRDA went to projects of state officials, their connected friends, and supporters.
Between the years 1986 and 2016, the CRDA spent $1.85 billion on various projects in Atlantic City.
Hopefully the state’s criticisms of CRDA’s dealings will mean the agency takes better care of the cash flow and can continue to do some good for Atlantic City.
When we last saw Floyd Mayweather, he appeared on a webcast with comedian K...
New Hampshire Governor Chris Sununu recently unveiled his proposed two-year...
One of the world’s biggest gambling companies is being hit with some majo...
New Jersey is having a solid start to 2019. Reports are coming out that cas...