Some Atlantic City casinos just became richer. It’s not because of a massive losing streak from its patrons, however. Instead, it’s because of a recent tax-appeal settlement cutting property values of three casinos by 35 percent.
Atlantic City has agreed to give $26.96 million back to Caesars Entertainment Corp. From 2009 to 2011, Caesars had paid property taxes for Bally’s Atlantic City based on the property being valued at $1.5 billion.
The Atlantic City Council agreed to settle the appeal filed by Caesars by reducing the Bally’s property valuation to $700 million.
Previously, property values for casinos were based on their land and buildings. Since the economic downturn, the casinos opted to take financial performance into account.
Atlantic City Mayor Lorenzo Langford claims the change to how casino properties are valued for purposes of the property tax is not fair:
“If the state of New Jersey really wants to assist the city, they should mandate that the casinos be assessed in the same way and manner as residential properties,” Langford said. “Property taxes are not reduced on the residential side if a property owner suffers a reduction in income or mismanages their financial affairs. Why should casinos be treated differently?”
Because the casinos are now paying less property tax, a budget shortfall is expected. The ultimate losers of these settlements may be the other local property owners.