NJ Casino News: Weekly Roundup

Get the latest casino news and updates in New Jersey for this week (December 25, 2021 – December 31, 2021).

AC Casinos Face Challenges With Growth of Online Gambling

Though American casinos had earned more than $1 billion in 2021 by September, seven of the nine Atlantic City casinos have seen a decline in their in-person funds won from gamblers during November, compared to 2019. The finger is being pointed at iGaming, especially considering that revenue from sports betting and online gambling must be shared among tech and sportsbook partners, rather than going solely to the casino:

“But the irony is that online gaming threatens in-person activity by suppressing overall visitor volume to the resort which, in turn, negatively affects brick-and-mortar gaming, city and casino restaurants, retail establishments and entertainment venues,” [former Atlantic City Expressway executive Tony] Marino said. “The challenge in 2022 is for the industry to maintain national leadership in digital gaming while marketing Atlantic City as a resort with multiple world-class attractions worthy of in-person visits.”

Through November, seven of the nine casinos showed declines in the amount of in-person money won from gamblers, compared to 2019.

Not counting Hard Rock Casino & Hotel and Ocean Casino Resort, which posted gains, the other seven casinos are down 22% in the amount won from on-premises gamblers.

The drop in land-based gaming revenue helped contribute to state lawmakers approving an amendment to a casino payment in lieu of tax agreement. Gov. Phil Murphy signed the bill into law. 

PILOT Signed Into Law, Already Sent to Mediation

After months of back and forth, an amended version of Atlantic City’s PILOT program was approved at the Assembly Appropriations committee meeting on Dec. 13. Basic PILOT payments for casinos is now set at $110 million, which is about $55 million less than they’d have had to pay under existing law. Shortly afterwards, the state passed the S4007/A5587.

Now, Atlantic County has filed a lawsuit against the state, citing that the new agreement unlawfully violates the terms that the casinos and state agreed to in 2016. New Jersey Superior Court Judge Joseph Marczyk believes that mediation is best step to take:

S4007/A5587 removes gross gaming revenue (GGR) from iGaming and mobile sports betting from being factored into the casinos’ PILOT calculation. The casinos’ property taxes are determined by using total GGR from the preceding year.

The casinos successfully argued that since much of the online GGR is shared with third-party operators like DraftKings and FanDuel that are not invested physically in Atlantic City, that income shouldn’t be included in the property tax. State fiscal projections expect the revision to save the casinos $55 million next year, and between $30 million to $65 million each year through the 2026 expiration of the PILOT arrangement.

Atlantic County receives 13.5 percent of the total PILOT money.

Atlantic County Executive Dennis Levinson wrote Murphy earlier this month, expressing his concerns that the PILOT savings afforded to casinos will come at the expense of county taxpayers.

Get Ready for Esports Tournament to Land in AC

Scheduled for Jan. 22-23, the Hard Rock Hotel & Casino Atlantic City will play host to the first sanctioned esports skill-based wagering event in New Jersey. The event will launch LANDuel, a peer-to-peer skill-based wagering platform specifically for esports. The tournament will allow participants to wager on their own matches in each round of the event:

“We are extremely proud to offer a one-of-a-kind e-sports wagering experience in partnership with EEG,” said Joe Lupo, president of Hard Rock Hotel & Casino Atlantic City in the statement. “We are confident that this innovative and highly regulated partnership will prove to be a success, contributing to our market-leading gaming offerings.”

The tournament is slated to have 256 participants, and the event itself will also have a dedicated space for those not taking part in it to engage in matches on the side through LANDuel which will also include guests of the Hard Rock Casino. The main event will be held on a showcase stage featuring spectator seating. The tournament comes on the heels of EEG acquiring the e-sports software company ggCircuit and Helix eSports which has five physical spaces dedicated to e-sports including two of the largest in the United States.

False Arrests at Golden Nugget Lead to Win Against NJ State Police

In November 2017, two men were arrested after making several $1,000 cash deposits at the casino cage for a newly registered Golden Nugget iGaming account. A compliance officer found that odd and contacted state regulators. Lawrence Mills and Daniel Chun alleged that they were violently detained by state police in the casino’s parking garage. Finding no probable cause, Federal Judge Harvey Bartle in the Eastern District of Pennsylvania ruled in a summary judgment on Dec. 20 that their arrests were unwarranted:

“The searches of Mills and Chun incident to their unlawful arrests were therefore also violations of their Fourth Amendment rights,” the judge wrote in his Dec. 20 ruling. Bartle added that the suspects were “put on the ground in handcuffs without explanation.”

…

Determining there was no probable cause, Bartle issued a summary judgment in favor of Mills and Chun against Wheeler. A summary judgment is a decision made based on statements and evidence without going to a court trial.

The judgment did not specify damages or a settlement arrangement.