Published: December 23, 2021

Judge to order mediation in Atlantic County lawsuit to stop new casino PILOT law

Judge to order mediation in Atlantic County lawsuit to stop new casino PILOT law

A Superior Court judge scheduled a conference with attorneys for Jan. 4 and said he will order mediation in the lawsuit Atlantic County filed Wednesday morning against the state to stop the new casino payments-in-lieu-of-taxes law from taking effect.

Judge Joseph Marczyk, to whom the case was referred, said Wednesday he will order mediation “as soon as possible” and told all parties to begin considering possible mediators.

The county will lose about $4 million a year under the new PILOT law, if enacted, the state Office of Legislative Services has estimated. The county says the loss is more like $5 million to $7 million.

The judge did not, however issue a temporary restraining order against S4007 and A5587, signed by Gov. Phil Murphy late Tuesday, as requested by the county to stop the law from taking effect while the case moves forward.

Marczyk said the case “involves important matters of public policy and complex financial issues and calculations,” and he needed to collect more information before making such a decision.

Casino Association of New Jersey President Joe Lupo could not be reached for comment Wednesday.

TRENTON — Gov. Phil Murphy has signed into law a bill that would give tax relief to Atlantic…

County Executive Dennis Levinson said the law is on the county taxpayers’ side.

“You can stretch (the law), which is what they did,” Levinson said of the Legislature rushing through the bills just before Christmas without discussion or transparency. “But it returns to normal when you let go.”

Most lawmakers are embarrassed by the way the bills passed, Levinson said.

“They promised the casinos they would do this and they did,” Levinson said. “They didn’t say it was going to stick.”

Levinson said the county had a consent agreement the lawmakers violated, calling the case “just a question of fundamental fairness.”

Levinson was talking about a 2018 settlement of an earlier lawsuit the county filed over the original 2016 PILOT law. That settlement was based on that original law through 2026.

“If either the Senate or Assembly bill is enacted into law, it will decimate this court’s consent order by causing Atlantic County to receive an estimated $35,475,000 less than the county has a right to receive under the consent order,” according to a certification document signed by Levinson.

State Senate President Steve Sweeney on Wednesday sent out a news release celebrating Gov. Phil Murphy’s signing of the new PILOT law.

“Like the original PILOT law that averted casino bankruptcies, these new laws were needed to prevent the potential closures of two to four casinos in the wake of two rocky years of reduced tourism and convention cancellations due to COVID-19 restrictions and fears,” Sweeney said. He could not be reached for comment about the lawsuit and judge’s order.

Sweeney has not provided any proof that four casinos were in danger of closing.

A spokesman for Murphy said the office does not comment on pending litigation.

The county’s attorneys filed an order to show cause in Atlantic County Superior Court.

Lawmakers still seeking info on PILOT bill they'll vote on Monday

The Legislature will vote Monday on bills to lower casino payments in lieu of taxes, as some…

The order asked Assignment Judge Julio Mendez to temporarily enjoin the state from enacting into law Senate bill 4007 or Assembly bill 5587, and to set an emergency hearing date to determine whether the bills violate the existing consent order from 2018 and should be permanently blocked from taking effect.

Mendez referred the case to Marczyk, who quickly signed the order to show cause.

The new legislation removes sports and internet gaming revenues from the calculation of what casinos owe in a basic PILOT, lowering their payments to an estimated $110 million under the new law from $165 million under the current law.

It gives the county the same amount in 2022 it received this year, about $17.5 million, but this year’s payments were based on depressed casino revenues from 2020 during the worst of the COVID-19 pandemic.

State Sen. Vince Polistina, R-Atlantic, said it was unfortunate a compromise he had suggested was ignored, and a lawsuit had to be filed.

“I proposed a common sense compromise ... which would have set the amount of money for Atlantic County taxpayers based on 2019 revenue rather than 2020,” Polistina said Monday.

Atlantic City Mayor Marty Small Sr. and the city administration support the new PILOT bills, saying the city will benefit from preventing more casino closures.

Small declined to comment on the lawsuit Wednesday.

OLS has estimated Atlantic City will lose funding under the new law as well, although some of the loss will be made up with increased investment alternative tax funds that do not go to the county.

Both houses of the state Legislature passed the legislation Monday, after rushed committee hearings with virtually no discussion of the bill’s details.

“To show you how bad this is, the sponsor of the legislation can’t even support it,” Levinson said of Assemblyman John Armato, D-Atlantic, who voted against the bill Monday, as did Assemblyman Vince Mazzeo, D-Atlantic.

Armato said Monday he was unable to get enough information from casinos about the need for the bill, particularly the names of the four casinos Sweeney has said would close without the bill.

Mazzeo said he opposed the bill Monday because it will mean less revenue for Atlantic County than it would receive under the existing law.

Sweeney sponsored the bill in the Senate, and said during a committee hearing that Atlantic County had gotten too large a share from the original PILOT legislation.

That share of about 13.5% annually, based on all gross gaming revenues, was determined by the court settlement.


© Public Gaming Research Institute. All rights reserved.