Never tell a casino you’re going to short change it.
On Monday, the Atlantic City Council approved a five-year budget required by Governor Chris Christie and the New Jersey legislature as an alternative to a state takeover of the city’s finances. Included in the five-year plan was a balanced 2017 budget, as well as a settlement of $103 million on the $150 million in tax refunds owed to Borgata Hotel & Casino.
For most, the budget was quite an achievement and worthy of applause. For Borgata, the budget wasn’t nearly as important as the fact that the casino would receive nearly $50 million less than what it should be getting from Atlantic City.
The resort casino released a statement via general counsel Joe Corbo:
“Borgata has not agreed to accept any offer to settle its tax refund judgments and pending tax appeals,” the statement began.
It went on to say that the casino has exhibited a willingness to compromise on the money owed to it, but that it’s seeking a “fair and equitable settlement.” The statement added that the casino looks forward to resuming settlement talks once the city’s fiscal plan is approved by the state.
The details of the ‘settlement’: Quick payment and future credit
The push back from Borgata isn’t necessarily a surprise; after all, the $103 million settlement put forth by the city council represents a more than 30 percent reduction in the original tax refunds owed to the casino.
However, according to the Philadelphia Inquirer, the plan actually calls for an additional $8.5 million in property tax refunds in the final quarter of the 2016-17 fiscal year. The proposed budget also includes a payment deadline of 90 days. For the financially weak city, the deal seems fair: $111.5 million in payments, $103 million of which is due in 90 days.
The state now must make a decision as to whether it will accept the five-year budget. Should the state approve the budget, big changes are on the way, wrote the Press of Atlantic City. One hundred city workers will be laid off and Bader Field will be sold to the city’s water authority, the paper said.
Borgata tallies profitable third quarter
Before the low-ball offer from the city, Borgata had enjoyed relatively good success during the past few months. In July, the casino took in $84.8 million — $80.8 million from land-based revenue and the rest from NJ online gambling.
The take for the month was so big, in fact, that it was, according to industry experts, Borgata’s biggest month in its 13-year history. The monthly win totals for the past the months are:
- July: $84.8 million, up from $71.8 million in 2015
- August: $65.5 million, down from $71 million in 2015
- September: $64.2 million, up from $62.9 million in 2015
In all, the casino’s win over the past quarter is up $8.8 million over the previous year.
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