Land and online gambling operators in the booming New Jersey regulated market are bracing themselves for a tax hike following state governor Phil Murphy's signing this week of a bill imposing an addition 1.25 percent tax on GGR in order to better finance New Jersey’s Casino Reinvestment Development Authority.
The new tax is set to kick in this December, raising the casino and pari-mutuel racetrack tax rate to 9.75 percent, and mobile bets to 14.25 percent.
The CRDA, which generates revenue primarily from Atlantic City casinos is tasked with economic and community development in Atlantic City by leveraging its available assets and revenues with private investment capital to support redevelopment projects throughout the city.
It is a controversial body which has been accused of not doing enough to attract and retain tourists to Atlantic City, a viewpoint that it appears the New Jersey Office of the State Auditor shares. It found that CRDA hadn’t deployed its funding appropriately and that a number of its projects had been mismanaged.
The CRDA has pushed back on the State Auditor's opinion, with chair Robert Mulcahy III, blaming the state for the problems. He pointed out that the loss of the Investment Alternative Tax caused the agency to fall into chaos and made it impossible to organise its programs appropriately.
Earlier this week an op-ed in the Press of Atlantic City claimed: “The CRDA was created as a way for state officials to distribute some of the windfall of casino gambling with little transparency and public accountability.
“We hope the state’s criticisms of its dealings with Atlantic City, along with its continuing oversight of city government, are the start of it finally taking responsibility for redeveloping what has been its gambling cash cow for 40 years.”