[intro]Atlantic City is now facing default after failing to pay a tax refund that was due on December 20th, 2015. Borgata, the gambling company responsible for filing the request is pushing that the Atlantic City Court to enforce the New Jersey city to pay up earlier. The tax refund application is due to overpayments for Atlantic City property tax on the Borgata Casino. At the moment, the tax refund is set at $62 million, and failure to pay could result in Atlantic City filing for bankruptcy.[/intro]
Borgata Gambling has been the largest source of gambling revenue for the east coast Las Vegas equivalent that is Atlantic City. The casino has brought in double the amount of money than its leading competitor, Harrah’s has. Although Borgata leads the land-based gambling industry in Atlantic City, the title will not stop the company from claiming the overdue tax refund. Borgata Senior Vice President Joe Lupo spoke out, explaining the situation to the Associated Press news agency.
He Stated, “We are simply asserting our rights as a taxpayer to receive a refund of overpayments. We are also disappointed that the city is focusing solely on us its attempt to resolve the situation. Atlantic City has paid refunds to every other casino property except Borgata.”
A Failing Case
The sole reason for a faulty property tax assessment is due to the declining gambling industry in Atlantic City. The beginning of the revenue downslide began in 2006, when Pennsylvania, New Jersey’s neighbor, started to open casino establishments.
The gambling economy has plummeted from an estimated worth of $5.2 billion to $2.7 billion in just under a decade. The $3.5 billion dollar loss pays tribute to incorrect property tax payments by several casinos in Atlantic City. Borgata, in particular, is requesting the $62 million tax refund for the fiscal years of 2009 and 2010. Borgata Senior Vice President Lupo says that this is not the first case Atlantic City has failed to reimburse Borgata properly for property taxes. Lupo says Atlantic City owes Borgata a total of $150 million.
The Mayor's Message
The Mayor of Atlantic City, Don Guardian, also spoke on the matter, stating that the city could not pay Borgata the entire amount. Mayor Guardian even went as far as saying that Atlantic City filing for bankruptcy if the court chooses to enforce the casino’s request immediately.
For now, the current filing is only giving 30 days for compliance but has yet to be signed off by a judge. Though the idea of asset seizure for Atlantic City would bring dismay to the state of New Jersey, more and more cases have been won for casinos claiming wrongfully assessed property tax refunds.
The Associated Press explains that Atlantic City needs reform for its gambling industry. “The city is already under the supervision of a state-imposed emergency manager, and a financial assistance package passed by the Legislature and awaiting Gov. Chris Christie's signature would hold $60 million in aid hostage until the city passes a fiscal recovery plan the state deems acceptable.”
Only time will tell the fate of Atlantic City as it, and Borgata awaits a ruling on the filed request. Atlantic City, which has been known as a gambling capital in the United States for many years, built a large gaming industry specifically for boosting its economy. Now, facing bankruptcy, Atlantic City will need to reassess its fiscal future.