Wednesday, June 29, 2022
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Judge Rules New Jersey Wrong in Atlantic City PILOT Bill Dispute

New Jersey goofed. The state violated the terms of a 2018 consent order between itself and Atlantic County when it hastily approved the PILOT Bill, a new casino payments-in-lieu-of-taxes law. However, it still may be able to go ahead with the program, despite its dubious legal status.

PILOT Bill in New Jersey Illegal

Last Friday, New Jersey Superior Court Judge Joseph Marczyk ruled that New Jersey’s government was out of line when it approved the new bill, according to an article by The Press of Atlantic City. However, the judge’s order does not prohibit the state from implementing the new PILOT legislation “except in the event they are subject to sanctions or damages.” This hearing will take place before Judge Michael J. Blee on March 23.

Atlantic County Executive Dennis Levinson told The Press, “What this means is they are going to decide now what damages we can collect and how we are harmed by this.” Governor Murphy’s office didn’t respond to a request for comment before the story was published on Friday.

The PILOT Bill swiftly made its way through the political maze and Governor Phil Murphy’s hands last December. To stop the law from going into effect, Atlantic County sued the state government.

The law drastically reduces the contributions to the county compared to what they would have received if the original PILOT law had been in place. It did this by excluding online gaming and sports betting from gross gaming revenue calculations. The county has argued that this violates an agreement between it and the state government, which took effect in 2018 as an amendment to the original PILOT program from 2016. Judge Marczyk has agreed.

New Jersey Not Playing By Its Own Rules

The consent order provided that the county would receive approximately 13% of the PILOT funds under the 2016 law. This law included online betting on sports and internet gaming as gross gaming revenues.

Levinson stated, “All they want is for them to keep their agreement and honor their promises.”

According to the county, the amendments will give the county $15 million to $26 million less through 2026 than the consent order under the original law.

John Lloyd, the attorney for the state, claimed that the legislature could define “gross gambling revenue” in any way it wished, regardless of the 2018 agreement between the state and the county.

Lloyd also argued, “gross gambling revenue” is not defined in any PILOT law or consent orders. It is only determined by the state Division of Gaming Enforcement.

Ron Riccio, county attorney, argued that the consent order was based upon the understanding that it included all gaming revenues, including brick-and-mortar and internet gaming. This is how the program has been running since 2018, and New Jersey can’t now arbitrarily change it to suit its own whims.

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