William Hill Sports Book at Ocean Resort Casino

The William Hill Sports Book at Ocean Resort Casino on the first NFL Sunday of 2018-19 season.

ATLANTIC CITY — Having lost its primary source of funding two years ago, the Casino Reinvestment Development Authority will now be getting a cut of the state’s growing sports betting market.

Gov. Phil Murphy signed legislation last week that dedicates 1.25 percent of sports betting revenue to the state authority. The additional tax is on top of the 8.5 percent of revenue generated at land-based venues and the 13 percent that is taxed on mobile and online sports betting.

The sports betting tax from the casinos will be used for “marketing and promotion” of Atlantic City. Sports betting revenue tax from the two state racetracks that offer the gaming amenity will be distributed directly to the facility’s host municipality.

Mayor Frank Gilliam, whose elected position grants him a seat on the 16-member CRDA Board of Directors, was not enthusiastic about the authority receiving money derived from businesses in Atlantic City.

“As mayor, I’m never going to be happy with revenue generated in Atlantic City going to a state agency when it could have been used to help the city,” Gilliam said Tuesday. “History has shown that marketing money has not been spent wisely.”

The new tax on sports betting revenue takes effect in December.

Since being introduced at New Jersey’s casinos and racetracks in mid-June, legalized sports betting has generated nearly $16.5 million in revenue, with $8 million of that figure coming from Atlantic City casinos and their online or mobile partners.

In 2016, the state Legislature redirected the casino investment alternative tax to pay down Atlantic City’s crippling debt. The IAT funds were the primary source of revenue for the CRDA, which now relies on luxury taxes as well as room and parking fees. CRDA had previously stated that the loss of IAT money amounted to nearly $22 million.

“After a three-year hiatus, we are looking forward to filling the void with much-needed promotion of Atlantic City as a world-class vacation destination,” said Larry Sieg, CRDA director of communications and marketing. “Our team looks forward to having the opportunity to once again get the DO AC brand into the consumer market to increase visitation and economic impact.”

A state performance audit of CRDA — the first in the agency’s 34-year history — released Sept. 11 identified numerous instances of fiscal mismanagement and waste as well as operational deficiencies. The scope of the audit only covered 17 months but highlighted deals with the Miss America Organization and LiveNation’s summer beach concerts as lacking proper return on investment protocols.

On Sept. 20, the state’s transition report for returning city government to local control also criticized CRDA’s spending, taking exception with projects such as the $14 million spent on Steel Pier’s Observation Wheel.

From 1986 to 2016, CRDA spent $1.85 billion on projects in Atlantic City.

Contact: 609-272-7222 ddanzis@pressofac.com Twitter @ACPressDanzis

Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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