March 7, 2016—A New Jersey lawmaker, Ralph Caputo, told media on Monday, March 7, 2016 that a 40 to 60 percent tax rate could be imposed on North New Jersey casinos. This lawmaker is pushing for this new tax to be imposed on winnings. Ralph Caputo is an assemblyman and democrat. The tax rate is going to be negotiated and “enabling legislation” may take effect.
No decision has been made regarding the referendum turned in. The referendum is going to be proposed to the state in November. The current tax for casino revenue is only 8%. Caputo would like to see it much higher. Jeff Gural, who operates Meadowlands Racetrack, offered to pay 55% in a tax rate. The offer is to help push through his proposed Hard Rock International Casino project.
Steve Sweeney, the state Senate president, does not believe the tax rate should be increased by that much. He believes a lower tax rate will help new casinos thrive, particularly for new casino proposals that will see an expenditure of $1 billion.
The tax rate has been stated in two proposals, where New Jersey casino operators said they would pay more. The referendum will need to be approved by three-fifths of both houses in the Legislature for it to make it to the November discussions. The vote for this is going to happen in the second, full week of March 2016. The two casinos stating they would pay such high tax rates may not make enough revenue to be passed.
The idea is for the casinos to be approved, built, and start paying high tax rates. However, the detriment to Atlantic City casinos would not be made up by those two new casinos. It would cause a loss of revenue in Atlantic City.